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Tips for negotiating a commercial lease

Landlords

Usually a landlord will want to secure a tenant for the longest possible period. Tenant rights to break the lease will reduce this period.

Landlords should consider the financial strength of the tenant and whether any guarantors should be provided or a rent deposit obtained. This due diligence exercise is best carried out before any heads of terms are agreed.

Some other key areas to remember:

Alterations – the tenant may wish to alter the property and consideration should be given to what is going to be acceptable. Some major alterations may leave the property unappealing to future tenants and an obligation to remove and reinstate is often recommended.

Tenants

A tenant should consider very carefully the extent of potential obligations in light of the length of the term of the lease. A longer lease may, for example, place more substantial repairing obligations on the tenant whilst with a shorter lease a tenant may understandably limit some obligations. The key is to ensure the extent of a tenant’s obligations are reasonable and proportionate to the benefit being obtained by the tenant.

Whilst it will also depend on the property type and other factors, in general a careful tenant should consider the following:

Our Commercial Property Team

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Newbury Thatcham Maidenhead
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