Leasing business premises is often more complicated than purchasing as it involves creating two separate interests in the same premises. It therefore becomes necessary to divide responsibility for matters such as repairs and payment of outgoings. A well-drafted Lease should clearly define the responsibilities of landlord and tenant and should ensure that there are no significant gaps in responsibility. Leases that deal inadequately or ambiguously with the division of responsibility are likely to be the subject of dispute and possibly litigation. Remember that investment in proper advice at the outset can save you a great deal in the long term.
Uncertainty surrounding repairing obligations can lead to particular problems for either party.
For example, the tenant of a unit on an estate or in a centre will be unhappy if the landlord fails to maintain the common parts to a reasonable standard and the lease gives him no rights to compel the landlord to do so. A landlord, on the other hand, will be extremely concerned if he finds that he is unable to recover all of the cost of maintaining those common parts from the tenants through a service charge. Rent review provisions can be another minefield. Either party can suffer financially if rent review provisions are deficient from their point of view. Leases are complex and our advice to landlords and tenants is always to seek expert legal advice at the outset before agreeing to any lease terms.