Merton Solicitors

What issues should I consider when examining a lease for an office?

You should consider the hours during which you will be allowed to use the office and the position on out of hours use.  Some landlords will charge extra if the offices are to be used out hours for utility and security costs.  Make sure you clarify this with the landlord or agent.

Also consider the facilities.  Will customers be visiting your office?  It might be a good idea to look for somewhere with secure visitor parking.  You also need to consider whether you need a kitchen (probably a good idea for employee morale) and separate customer and staff toilets.

Many offices include service charges where there areas are used by a number of businesses, which can include escape routes, receptions, parking.  It is also likely there will be fees for general maintenance .

Have a look at the actual lease. What do the break clauses state?  There are two types of break clause: unilateral (one party breaking the lease) and mutual.  Break clauses will usually include details with regards to notice, the amount of time required and the formal procedures that need to be followed.  It is also common for break clauses to state that they will not be effective unless the premises are handed back in their original state.  If they are not, you may be liable for the whole lease term even though you do not occupy the premises.

Should I register my lease?

If the lease is longer than seven years, it needs to be registered at the Land Registry.  When registering land, you will have to follow formal procedures and pay Land Registry fees. There are benefits to registering a lease.  It provides you with some degree of formal protection as registration makes it known to third parties and lenders you have an interest in the land.

My lease is going to come to an end within a year.  What will my liability for dilapidations be?

The majority of leases will place tenants under a duty to leave premises in a good state of general decoration and repair.  It also likely that you will be placed under a duty to restore the premises to their original condition.  Some leases may even go so far as to require you to leave the premises in a better state of repair.  Failure to do this where provisions of this nature are included in the lease might make you liable for a breach of contract and damages.

In any case, you have to come to a decision and ask whether you have any liability and if so the extent of it.  Your liability can vary according to the duration of the lease, any plans the landlord has for the property and the general condition of the letting market.   If you believe you are liable, you could do the repairs yourself or come to a financial settlement with the landlord.

I want to renew my lease.  Can I renegotiate the terms under the Landlord and Tenant Act 1954?

The law will only come into play where you and the landlord cannot come to an agreement.  The Landlord and Tenant Act states that the lease will be agreed on the same terms although terms regarding rent can be varied.  If the dispute continues, the courts will ultimately decide on the terms with reference to the Landlord and Tenant Act, the current lease and the surrounding circumstances.  Rent will be decided according to what is reasonable for the premises and references to the local lettings market will be obviously relevant in this decision.

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