Commercial Property Frequently Asked Questions

There are several stages when taking on a commercial lease and we appreciate you will have numerous questions regarding the matter. We answer some of those most frequently asked questions here, but do not hesitate to contact us with any further queries.

Why do I need legal advice for my commercial lease?

Leases are hugely technical and something that can seem incongruous on first reading may have significant implications at law and those implications can be very expensive. Taking proper advice before you enter into your lease means you understand exactly what your liabilities are at the outset, hopefully alleviating any nasty surprises further down the line.

How long will it take to agree my commercial lease?

Generally speaking, up to six weeks. Much depends on the other parties and the speed of the search results. If you are desperate to get into occupation, please advise us at the time as there may be other options available to you.

What responsibilities do I have as a tenant under my commercial lease other than paying the rent?

Your responsibilities under a commercial lease depend entirely on the drafting of it. Generally though, you are liable for the repair and decoration of the property, and paying rates and utilities. Your responsibilities also include complying with all laws on fire safety, energy efficiency, contamination, asbestos management and anything prescribed by the local authority. We will be able to guide you on exactly what your lease requires you to do and what you are not permitted to do, alternatively you can view our Commercial Property Checklist for initial guidance.

Other than your costs, what else do I need to pay for upfront for my commercial lease?

You will likely need us to carry out conveyancing searches. There may also be SDLT (Stamp Duty Land Tax) implications of taking your lease, and potentially a Land Registry fee for its registration. We will be able to give you a clear breakdown of these costs once we have the property and lease details.

Why do you need to carry out due diligence on the property? I’m only taking a short commercial lease.

For the period that you are in occupation you are (subject to the terms of your lease) responsible for everything to do with that property, much in the same way as if you owned it. If you don’t know what the potential issues are, you cannot budget or prepare for them, or even decide to walk away before you sign any paperwork. We can also discuss with you whether your property can lawfully be used for what you need to use it for before you commit to paying rent for years at a time.

Why do I have to pay Stamp Duty Land Tax (SDLT) on a commercial lease?

Stamp Duty Land Tax is payable on the acquisition of an interest in property, even where the interest is acquired for a short term under a lease. The tax due is calculated on the rent over the length of the term where this figure is over the threshold of £150,000 for commercial property. Generally speaking, the longer the term and the higher the rent, the more likely that SDLT will be payable. We will be able to prepare a proper calculation for you where necessary.

Why does my commercial lease need to be registered?

Leases over seven years are subject to compulsory registration at the Land Registry.

Why are commercial leases so long and complicated?

Probably the most asked question! Unfortunately, attempts to simplify such complex legal documents often lead to ambiguity and vagueness. What may seem straightforward now when it is fresh in your mind may not be clear in a few years time or to your successors in title. As a result, it is these leases that are often brought to the courts for interpretation, which is expensive and easily avoidable. Having concise drafting detailing exactly what the parties want means that everyone knows what is expected of them.

Do I still have to comply with the commercial lease covenants even though I’m paying a premium for the property?

Yes, you do. Owning a long leasehold interest is still a lease and you will still have to comply with the lease terms. We will be able to clarify what these are and their implications.

If you have any queries at all on entering into a new lease of a commercial premises, please contact our Southampton or Portsmouth Commercial Property teams on the following details:

The Southampton Team:

The Portsmouth Team:

To speak to one of our experts please call us