Landlords: top 5 practical tips for ensuring the smooth granting of a new commercial lease

Granting a new commercial lease can be a complex process, with a number of legal and practical steps to get right before terms are agreed and the lease is signed. For landlords, getting the groundwork in place early can make all the difference in avoiding delays, disputes or unexpected costs later on.

Here are five practical tips to help keep the process running smoothly.

1. Comply with statutory requirements

Before marketing or progressing the lease, make sure all required statutory documents are available and up to date. This should include:

• an Energy Performance Certificate (EPC); and
• an Asbestos Survey, where applicable.

Check that the EPC rating satisfies the minimum energy efficiency requirements. If not, the property may not be legally lettable (or not without further action such as improvement works or registering an exemption). Addressing these issues early helps avoid delay and reduces the risk of future liability.

2. Collate title documents and property information early

Gather the key property documents before negotiations begin, including:

• title documents;
• a Land Registry compliant lease plan;
• planning permissions and other relevant approvals; and
• up-to-date replies to Commercial Property Standard Enquiries (CPSEs) and supporting documents such as VAT documentation, insurance policies, service charge accounts and budget, fire risk assessment, H&S files etc.

Engaging a solicitor early helps identify any title issues that could affect the grant of the lease and time to resolve any issues before they delay the transaction.

3. Agree clear Heads of Terms at the outset

Clear and detailed Heads of Terms help reduce misunderstandings and streamline the drafting process. They should cover the main commercial and legal points, including:

• rent;
• term;
• rent review frequency and mechanism;
• repairing obligations;
• permitted use; and
• break options.

A chartered surveyor can negotiate and prepare these for you if needed, with legal input where required.

4. Check the tenant’s financial position and consider security

Assess the tenant’s financial standing, particularly where the tenant is newly established, or has limited trading history. Depending on the circumstances, consider whether additional protection is needed, such as:

• a rent deposit; or
• a guarantor.

Taking these steps at the outset can reduce the landlord’s exposure if the tenant later defaults on its rent payments or other lease obligations.

5. Coordinate with third parties early

Identify any third-party consents or involvement required and deal with them as soon as possible. For example:

• if the property is charged, approach the lender for consent;
• if there is a superior landlord, apply for any required consent; and
• keep agents, solicitors, and other advisers aligned on the transaction timetable.

Early coordination helps maintain momentum and reduces the risk of avoidable bottlenecks and unexpected costs.

Limitations

These tips provide general practical guidance only. Bespoke advice will depend on the specific transaction terms. Specialist input may also be required on matters such as tax, planning, environmental issues, or other transaction-specific risks.

Get In Touch

Helen Marsh is a Partner in our Commercial Property team. She has over 20 years’ experience in commercial property and has earned a reputation for her expertise in landlord and tenant work in the hospitality, retail, office and warehouse sectors, acting for known brands with 200+ stores to entrepreneurs taking on their first site.

If you’re looking to understand more about your legal position, contact one of our expert commercial property solicitors today on 0330 111 3131 or via our online enquiry form.