Business Lease - Drafting the Heads of Terms
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Issued on 26th October 2010
Heads of Terms are an important part of
the leasing process for business premises. Their importance is due to
every lease containing a certain number of terms which can be varied,
such the lease term, the rent, the frequency of any rent reviews and
break option, to name a few. The Heads of Terms allow for these terms
to be informally agreed before the parties instruct solicitors and
start to incur legal costs.
A model Heads of Terms is contained in The
Code for Leasing Business Premises in England and Wales 2007, which has
been created by property professionals and industry bodies representing
both Landlords and Tenants. The following is a list of the main terms
that any lease negotiation should consider, though it should be borne
in mind that it is not exclusive:
1. The property address
2. The Landlord's name and address
3. The Tenant's name and address
4. The rent
5. Any rent free period
6. The type of Lease (Head lease or sub
7. Term of the lease
8. Any break option and its frequency
9. Any rent review and its frequency
10. Lease renewal option (whether the
Landlord & Tenant Act 1954 Part 2 applies)
11. The legal representatives of the
12. Miscellaneous terms:
- - Assignment and/or sub-letting allowed?
- - Payment of services and/or service
- - Insurance and repairing obligations
- - Payment of legal costs
- - Any Guarantors?
- - Any Schedule of Condition to be prepared
at the start of the lease?
All parties interested in a lease should
aim to (informally) agree the terms of the lease at the very start of
the process. In practical terms, this part of the process can take up
more time than that actual drafting and signing of the lease itself.
Commercial agents and commercial property solicitors can help prepare
and guide parties through this vital stage in the leasing process.
If you are a Landlord or Tenant and
interested in leasing a property, then get in touch with Lawdit
Solicitors' Commercial Property department who can help and assist you
with your lease transaction.
Inam Ali is
a Solicitor at Lawdit, specialising in Commercial Property and
Intellectual Property Law, and can be contacted via email: email@example.com
About the Author
Lawdit Solicitors offer services and
advice for litigation, commercial contracts, Intellectual Property and IT legal
agreements. We are experts in commercial law with a heavy emphasis on
Intellectual Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of Higher Court
Advocates and we are the appointed Solicitors to the largest webdesign
association in the world, the United Kingdom Website Designers Association.
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Article Published/Sorted/Amended on Scopulus 2010-11-02 12:08:27 in Legal Articles