Whether you are signing your first lease or getting ready for a move or a renewal, you need to have a thorough understanding of what a commercial lease agreement in the UK is. Unlike a residential lease, a business tenancy agreement is very much a “buyer beware” type of thing.
What this means is that your rights are exactly as they are set out in the commercial rental agreement, with little to no legal protection outside of that.
Just what is a commercial lease agreement?
A commercial lease agreement, or commercial tenancy agreement, is essentially a contract between a landlord and a business. This lease agreement between two the parties essentially sets out various terms, rights and responsibilities of both the tenant and the landlord.
The word “commercial” simply means that the lease is for business use, as opposed to housing. There are many different business tenant types, from a sole trader with a small but growing business to large multinational corporations and everything in between such as those needing an auto repair shop lease agreement.
What are the key lease terms for Commercial Letting Agreements?
The majority of commercial property agreements have two main objectives. Firstly to have a record of terms and conditions of the agreement, and secondly to provide a degree of legal protection for, to guard each party (landlord and commercial tenant) against a possible breach of terms against the other. Nobody wants to secure the services of a law firm either, which is also partly why we have provided a free commercial/business lease agreement template.
A lot of the time, lease agreements are signed, put in a drawer and never seen again. However, a business property lease agreement rarely falls into that category. Both the tenant and the landlord will often look over the document to remind themselves of their obligations rights, especially where repairs and maintenance are concerned.
What are the tenant’s responsibilities?
A tenant has certain legal responsibilities outside of the terms and conditions of any commercial letting agreement. These cover things like ensuring the safety of staff, customers and visitors of the property, as set out by the Health & Safety Executive (HSE). All business owners need to be aware of the HSE laws and regulations.
Commercial tenants also have the responsibility of informing the landlord of any maintenance issues, making sure fire alarms and smoke detectors work etc. It would normally be the responsibility of the landlord to have issues addressed, but the tenant must inform them.
Of course, there is also the issue of rent payment. These must be made and made according to the terms set out in the commercial leases agreement.
What are a landlord’s responsibilities in a Commercial Tenancy Agreement?
Commercial property landlords have a responsibility to ensure that the commercial property that they are letting is safe for not just the tenant but also anybody else that may be using or visiting it. There are often confusions around who is responsible for what, and this is largely because commercial property leases are not the same as those that cover residential properties.
There are considerable differences between the two types of lease, and the responsibilities of landlord and tenant can overlap. Generally speaking, however, a commercial property landlord will be responsible for the structural maintenance of a building, and depending on the agreement they may also have to make sure fire alarms, smoke detectors etc. are also fully functional.
A commercial landlord should also make sure that the tenant can sufficiently heat the building, and also make available sufficient lighting, washing, cleaning and bathroom facilities. They may also be responsible for gas and electricity, or the responsibilities for these may overlap with the tenant’s – it all depends on the terms and conditions set out in the agreement.
Download your free commercial lease agreement template for the UK
All in all, commercial letting agreements can be complicated until you get used to drawing them up. That said, however, even if you are an old hand a template can still save a whole lot of time. Download your free commercial letting agreement today, and save yourself the headache of starting from scratch.