Costs will be incurred prior to the completion of the lease, on and following completion of the lease, and finally, following termination of the lease.
Prior to completing the lease, a well-advised tenant will typically incur the costs of a buildings survey, tax advice, professional legal advice (including search fees, HM Land Registry application fees and Stamp Duty Land Tax liability), other professional (e.g. an architect’s) fees, as well as the costs of fit-out works, although this is a non-exhaustive list. The landlord may also incur the costs of a surveyor, in addition to their own legal fees which the tenant may or may not contribute to.
On and following the lease being entered (‘completion’ of the transaction), the tenant will be liable to pay the starting rent (including any rent deposit), service charge contributions, insurance contribution, and rates and taxes at the property. The tenant may also be required to pay the landlord’s costs pursuant to any licence (consent) for the tenant’s assignment, underletting, or alterations to the property.
Upon termination of the lease, a tenant can expect to incur costs arising from repairs to the property (to reinstate the premises to the condition required by the lease), and the removal of the tenants’ fixtures, fittings, and business apparatus.The tenant may also be charged a fee by the landlord relating to the exercise of a break right. They may also be tax implications from VAT to Capital Gains Tax, which the tenant should seek tax advice for.