We act for landlords and tenants in relation to commercial leases. Our experience includes the letting of offices, retail space and industrial units.
Every lease is different and will depend ultimately on the bargaining position of the parties. Here are some of the things landlords and tenants will want to consider when agreeing the heads of terms:
- The length of the lease: Commercial leases usually fit into two categories, long term leases (greater than 5 years) or short term leases (less than 5 years). From the landlord’s perspective, it’s important that the tenant doesn’t acquire rights to stay in the property beyond the agreed term and often the parties will sign a ‘Deed of Renunciation’ to address this point.
- The repair and insurance obligations of the tenant: The tenant will agree to ‘internal repair and insure’ obligations (where they have no responsibility for the structural or exterior aspects of the property) or ‘full repair and insure’ obligations (where they take responsibility for the entire property). Often this clause is heavily negotiated and it’s important to involve your solicitor in these discussions from the outset.
- Service charge: This is common in shared spaces such as shopping centers. The parties will agree a mechanism where the landlord is appropriately compensated for maintaining the common areas benefiting the tenant.
- Rent review: Since the abolition of upward only rent reviews, parties to commercial leases agree various mechanisms for adjusting the rent amount. Frequently, parties will agree that the rent will be amended to reflect a market value rent at the time of the rent review.
- Break options: It is common for landlords and tenants to agree that a lease can be terminated before the end of the full term. This gives the parties flexibility to terminate the lease if it no longer serves their business needs.
Commercial leases can be complex and it can be time consuming to reach an agreement. However, they are far less time consuming than the disputes that a well drafted lease can prevent. It’s important that you have an experienced solicitor on your side who not only knows the law, but can anticipate the practical issues that are likely to arise during the term of the lease and deal with them in advance so they don’t disrupt your business in the future.
“Emma Farrell represented us as landlords in the negotiation of a 10 year lease on a commercial property in Dun Laoghaire. Throughout the process Emma was proactive, anticipatory and timely, managing a complex negotiation with charm and ease, always making us feel we were in expert hands, with our best interests in mind. She provided sage advice throughout the process, always promptly returned our calls and kept us up to date at all times. It was a pleasure to work with her.” Commercial client, 2021