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Free Commercial Letting/Business Lease

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  2. Email, download or print instantly
  3. Just takes 5 minutes

Commercial Letting/Business Lease

QGLeaseType


Office
Building
Retail
Restaurant
Industrial
Warehouse
Other


Contract Length

Standard
Comprehensive



Property Location

Where is the property located?
England

EnglandBuilt for England
Different countries have different rules and regulations. Your Commercial Letting/Business Lease will be customised for England.


e.g. Street, City, England, Postcode



Frequently Asked Questions
Is this lease suitable for all commercial purposes in England?This commercial lease may not be suitable for charities (as tenant or landlord), agricultural leases or a lease granted under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993. In those cases, you should consult with a local solicitor.

Property Description


If the lease is for a term of 7 years or more, provide a full description of the property being leased (i.e. as detailed as possible) for Land Registry purposes.

Where mines and minerals, timber and trees, stream beds, roads or other physical features are specifically excluded, you should state this in the legal description.

Your lease may be deemed defective or your application may be rejected without a complete description.


Permitted Use

e.g. retail shop, office, storage, restaurant, beauty salon, café, etc.


Competitor Leases



Other Uses



Parking

do not include in the lease
yes
no


Pets

do not include in the lease
yes
landlord's consent
no



Lease Term

fixed term
monthly
yearly

What is the lease term?



Frequently Asked Questions
Retail leases in most states/territories of Australia must be at least 5 years long. If you're unsure how long your lease should be, you can check the applicable legislation of your state or territory. or consult local authorities.

Early Possession



Break Clause



Security of Tenure



Frequently Asked Questions
What is security of tenure?Security of tenure refers to the tenant's right to remain in the property.

The Landlord and Tenant Act 1954 provides that commercial tenants may have security of tenure, or a right to apply for a new tenancy when their lease comes to an end. However, under the same law, parties can also "contract out" of the Act and agree that the tenant will have no security of tenure.

If the parties do not contract out of the Landlord and Tenant Act 1954, special notices (Section 25 Notice or Section 26 Notice) will have to be served by the landlord and/or tenant in order to extend the lease or to oppose the extension.

Assignment

with landlord's consent
no

Note: Unless the particular circumstances of the letting justify greater control, the only restriction on assignment of the whole property should be obtaining the landlord's consent which is not to be unreasonably withheld.


Frequently Asked Questions
What does it mean to assign or sublease?If a tenant assigns the lease with the landlord's consent, all of the tenant's rights are transferred to a third party for the remainder of the lease term.

In contrast, the tenant can sublet their right to use all, or part, of the property to a third party, for all or only a portion of the remaining time in the lease. The original tenant would still retain some rights under the lease.

Type of Rent

gross rent
gross rent plus specified costs
gross rent plus all costs

iconThe tenant will pay a fixed base rent. Additional costs are paid by the landlord.

Rent Details

weekly
biweekly
monthly
yearly

How much is the monthly rent?
£
e.g. 2,000


Rent Payment

first day
fifteenth day
other



Rent Increase



Late Payments




Prepaid Rent



Frequently Asked Questions
What is prepaid rent?Prepaid rent is a payment (or payments) made to the landlord at the outset of the lease that the landlord holds as security for the applicable rent payments.

Prepaid rent is different from a security deposit, which is a payment the landlord holds as security for damages other than rent.

In the next step, you can indicate if the tenant is required to pay a security deposit.

Deposit Details



Frequently Asked Questions
According to the applicable legislation of your state or territory., the maximum amount allowed for a security deposit in a retail lease in England is information that would should check with a local authority.

Utilities and Other Expenses

Who is responsible for paying the following utilities and service charges?


Tenant Pays Direct

Tenant Pays Landlord

Landlord Pays

Do Not Specify

Electricity





Gas





Water





Sewer





Telephone





Internet





Cable TV





Other Expenses







Frequently Asked Questions
How should different costs be listed?In a gross lease, all service charges (e.g. taxes, repairs, maintenance, etc.) are typically paid by the landlord, which means that if the landlord wants to charge the tenant for them, they will need to be factored into the rent. However, if it’s been negotiated between the parties that the tenant will pay any operating costs in addition to the rent, specify those additional costs here. Do not address insurance on this page as it will be addressed at a later step.

Utilities (e.g. electricity, water, gas, etc.), on the other hand, are not automatically paid by one party in a gross lease; their treatment must be negotiated and can be assigned to either party on this page. What is "Tenant Pays Direct" for utilities?The tenant is billed directly and pays this expense directly to the provider of that utility. This expense would be in addition to any amounts paid to the landlord for rent.What is "Tenant Pays Landlord" for utilities?The tenant pays their share to the landlord who then pays the amount to the supplier of that utility. If the tenant doesn't have a separate meter, they just pay their proportionate share of the total cost. This expense would be in addition to any amounts paid to the landlord for rent.What is "Landlord Pays" for utilities?The landlord pays any utility charges to the supplier of the utility and the tenant is not directly responsible for this expense.

Insurance

Who is responsible for obtaining and paying for the following insurance?


Tenant
Pays

Landlord Pays

Both

Landlord's Contents




Leased Property




Occupiers' Liability







Landlord Details

Who is the landlord?

Landlord

Individual
Corporation

e.g. ABC Corporation

e.g. Street, City, Country, Postcode




Add another landlord

Frequently Asked Questions
How should I write the company number?For Scottish companies, use a SC prefix, and for limited liability partnerships, use an OC prefix. For foreign companies, give the territory in which incorporated.

Tenant Details

Who is the tenant?

Tenant

Individual
Corporation/Company

e.g. ABC Corporation

e.g. ABC Business Advisors

e.g. Street, City, Country, Postcode




Add another tenant

Frequently Asked Questions
What is a trading name?The trading name is the name the tenant’s business uses in its advertising. The tenant will not be allowed to carry on business under any other name.How should I write the company number?For Scottish companies, use a SC prefix, and for limited liability partnerships, use an OC prefix. For foreign companies, give the territory in which incorporated.

Guarantor



Frequently Asked Questions
Who is a guarantor?A guarantor is a person who agrees to pay the landlord directly for any losses should the tenant fail to pay rent or otherwise breach the lease agreement.

A guarantor cannot be one of the tenants.

Landlord Improvements

Landlord gives consent
Specify in a list
Do not include in the lease


Tenant Improvements

Do not include in the lease
Landlord gives consent
Specify in a list


Landlord's Movable Property

Do not include in the lease
Yes
No


Signing Concessions



Miscellaneous

do not include in the lease
yes
no

do not include in the lease
tenant pays
losing party pays


Frequently Asked Questions
Is an inspection report necessary?A Rental Inspection Report is highly recommended in order to protect yourself and your property. Without one, it is difficult to prove damages were done by a tenant.

LawDepot offers a Rental Inspection Report that can be completed after you finish your lease agreement.

Required Notice Before Eviction

How many days' written notice is the landlord required to give before evicting the tenant?How many days' notice are required?While parties of commercial leases are generally allowed to negotiate most of the terms of the contract, including notice periods, it is advisable to consult your local laws to ensure that any minimum notice requirements are met.

For failure to pay rent when due:

days' written notice


For any other lease violations:

days' written notice

Additional Clauses



Frequently Asked Questions
When should I include an additional clause?You should include an additional clause if there are any terms or issues unique to your situation that have not been addressed in the questionnaire.In order to reduce confusion, write your clauses with plain language and limit them to one paragraph in length.

Also, use any predefined terms such as Tenant, Premises, Landlord, etc. in your clauses.

Signing Details

unsure
specify date


Who is signing for the landlord?

e.g. John Walter Adams



Who is signing for the tenant?

e.g. Rebecca Andersen






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Commercial Letting/Business Lease Page of
Page of

BUSINESS LEASE

THIS LEASE (this "Lease") dated this ________ day of ________________, ________

BETWEEN:

______________________ of _________________________________
Telephone: ______________________  
(the "Landlord")

OF THE FIRST PART


- AND -

______________________ of _________________________________
Telephone: ______________________
(the "Tenant")

OF THE SECOND PART

IN CONSIDERATION OF the Landlord leasing certain premises to the Tenant, the Tenant leasing those premises from the Landlord and the mutual benefits and obligations set forth in this Lease, the receipt and sufficiency of which consideration is hereby acknowledged, the Parties to this Lease (the "Parties") agree as follows:

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What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a binding contract between a landlord and a business (the tenant) renting a property. Unlike a Residential Tenancy Agreement, this contract is specifically used for tenants leasing commercial property. This agreement outlines the terms and conditions for renting the business space, including rent terms, use of the property, and lease duration. 

A Commercial Lease Agreement is also known as a:

  • Commercial property lease agreement
  • Commercial tenancy agreement
  • Commercial letting agreement
  • Commercial rental contract
  • Business lease agreement
  • Shop lease agreement

LawDepot’s template is available for renting commercial spaces in the United Kingdom (England, Wales, Scotland, and Northern Ireland).

Why it’s essential to use a Commercial Lease Agreement

Having a written Commercial Lease Agreement is essential for both landlords and tenants, especially for providing the following protections and guidelines:

  • Defines the terms and conditions of renting the space, like the lease duration, rental fees, and renewal options
  • Establishes the responsibilities of both parties, such as who is responsible for maintenance, repairs, and utilities
  • Outlines the permitted use of the commercial space, ensuring that the property is used for the correct business purposes and activities
  • Protects both parties to ensure their rights are outlined and followed (e.g., the tenant pays rent on time or the landlord maintains the property as the lease specifies)
  • Provides evidence in case a future dispute occurs

Additionally, some business lease terms, like the renewal terms or repair obligations, can be negotiated between the landlord and potential tenants. The final decisions can then be used to help draft a mutually agreed-upon contract. 

Both parties can have a solicitor review their agreement before signing to ensure it’s fair and complies with legal requirements within their respective countries.

Types of Commercial Lease Agreements

The different types of Commercial Lease Agreements vary by their form (short-form vs. long-form) and term length (fixed-term vs. periodic leases).

Short- vs. long-form agreements

There are two forms that a contract for a commercial lease can come in:

  • Short-form, or standard, commercial leases typically include basic information and clauses to protect both the landlord and the tenant. 
  • Long-form, or comprehensive, commercial leases include extra clauses and terms that make the contract much more detailed. If your rental requirements are more complicated, a long-form agreement is recommended.

LawDepot’s Commercial Lease Agreement template comes in both short-form and long-form agreements.

Fixed-term vs. periodic leases

There are two primary types of lease terms in a commercial lease, designed to accommodate different landlord-tenant situations and preferences. 

A fixed-term lease has a specific end date and may be for any number of weeks, months, or years. At the end of the term, the contract can be renewed, terminated, or the tenant can continue to let the property on a month-to-month basis. Conditions of this lease cannot be changed until the lease is renewed (e.g., rent cannot be increased until renewal).

In the UK, fixed-term commercial leases vary depending on the business’s needs and size, with terms ranging from 1, 3, or 5 years to longer agreements of 10 to 25 years.

A periodic (month-to-month or year-to-year) lease automatically renews every month or year until either the tenant or landlord terminates it. These leases are considered more flexible because either party can end the agreement by giving the appropriate notice, without waiting for a fixed term to expire.

LawDepot offers both fixed-term and month-to-month or year-to-year leases to fit the purposes of your commercial property. 

Key components of a Commercial Lease Agreement

A Commercial Lease will often include information such as:

  • Property details like location and description. In England and Wales, if a lease is for 7 years or more, a complete description is required for Land Registry purposes.
  • Names of the parties involved and their contact details.
  • The lease term, meaning the duration of the contract.
  • Payment terms like rental fees, deposits, and the payment schedule.
  • Early renewal or break clause, if applicable.
  • Permitted use of the property, specifying what the tenant can do with the property.
  • Allowed alterations or required improvements for the property. 
  • Any included utilities, insurance requirements, and other expenses.
  • Dispute resolution guidelines to help if any disputes occur in the future.

When should I use a Commercial Lease?

If you’re renting out business property, you should use a Commercial Lease Agreement to protect both you and your tenant. This can be for properties such as:

  • Office spaces, like suites for corporate purposes
  • A building for a larger company
  • Retail shops for boutiques, supermarkets, or other forms of retail businesses
  • Restaurants or cafes for spaces with kitchen facilities and seating areas
  • Industrial facilities or warehouses for operations that need the appropriate size of space and storage

LawDepot’s template is available for many types of businesses and commercial properties, but may not be suitable for all types of leases, such as those concerning charities or agricultural leases. In those cases, consider consulting with a local solicitor.

Can I write my own Commercial Lease Agreement?

Yes, you can create your own Commercial Lease Agreement with LawDepot’s customisable template. Writing your own contract can help you tailor it to your rental needs, based on any negotiations between the parties and the type of property you’re leasing, which can help protect your investment.

How to write a Commercial Lease Agreement?

Use LawDepot’s template to write your Commercial Lease Agreement to download and print in minutes. Simply choose the kind of property you’re leasing, then complete the following steps:

  1. Choose a contract form to determine the next prompts for your contract (i.e., a standard contract for set terms or a comprehensive contract to customise particular standard clauses) 
  2. Add the property details (e.g., location, property description, permitted use, and parking)
  3. Include the lease term (i.e., fixed, month-to-month, or year-to-year) and start date of the lease
  4. Add additional terms like early possession, a break clause, or assignment and subleasing permissions
  5. Outline the fees (e.g, rent type, rent due date, and applicable late payment charges)
  6. Add any additional fee details like prepaid rent, and who is responsible for expenses, service charges, and insurance
  7. Provide both the landlord's and the tenant’s details (e.g., name and contact details)
  8. Specify if a guarantor is required
  9. Add any additional applicable terms, such as landlord and tenant improvements, signing concession, and who covers legal costs in a dispute
  10. Finally, add the notice period for evictions and signing details

Commercial Lease Agreement FAQs

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What are commercial landlord rights and responsibilities in the UK?

UK commercial landlords have various rights under their local tenancy laws. For example, the Landlord and Tenant Act 1954 primarily governs the rights and obligations of both parties in England and Wales. Landlord rights include:

  • Collecting rent and taking action for any late or missed payments
  • Initiating a Section 25 Notice when a tenancy expires to regain possession of the property if the conditions meet legal requirements
  • Regaining possession of the property if the tenant breaches the agreement 

When leasing business property, the owner of the property will generally be responsible for:

  • Upkeep of the property and seasonal maintenance tasks, such as snow removal or landscaping
  • Allocating how the tenant will be allowed to use the property
  • Ensuring compliance with applicable health and safety requirements (for example, fire, gas, and electrical safety) in those parts of the premises under the landlord’s control, or under shared control with the tenant, as required under the Health and Safety at Work etc. Act 1974

A landlord will also be responsible for ensuring that rent payments are allocated to the lender if the property is mortgaged, as well as for providing insurance for the property itself. Check your local legislation and lease for additional landlord rights and obligations.

What are commercial tenant rights and responsibilities in the UK?

Like landlords, commercial tenants have rights under tenancy laws in their jurisdiction, which include:

  • Having a safe and maintained property
  • Protection against unfair eviction
  • A fair rent review process 
  • Requesting lease renewals at the end of the contract
  • Using the property as permitted by the lease

On the other hand, tenant responsibilities include:

  • Paying a portion of the total utilities cost, unless they’re required to pay the provider directly
  • Covering the cost of minor improvements, such as paint, office supplies, etc.
  • Paying rent for the space provided
  • Maintaining the health and safety of the rented space they control, as well as any areas where they share control with the landlord, as required by the Health and Safety Work etc Act 1974

Check your local legislation and lease for additional commercial tenant rights and obligations. 

Is a Commercial Lease Agreement legally binding in the UK?

Yes, valid Commercial Lease Agreements are legally binding in the UK. Commercial leases are governed by contract law, but protections for both parties fall under tenancy law. Once both parties sign the contract, it is enforceable, and both parties must adhere to its terms. If either party breaches the agreement, they could face legal consequences. 

Either party can have the contract reviewed by a solicitor before signing to ensure it's fair and valid.

Can you terminate a Commercial Lease Agreement early?

A commercial lease can be terminated early if it's done legally and in accordance with the lease agreement. Ways to terminate a lease early include a break clause, which allows the lease to end early, provided the terms are met. Alternatively, if the agreement permits it, a tenant can assign the lease to a new tenant or sublease the commercial space to a subtenant. 

It’s essential to terminate the agreement in accordance with the original lease agreement’s terms, as either party may be in breach of contract and face legal consequences for violating the contract or eviction laws. 

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