Commercial property is governed by the terms of a commercial lease which is normally quite different from a residential lease. Up until relatively recently, residential tenants were responsible for various fees and the same usually applied to commercial tenants. In this article, who pays for a commercial lease agreement, we look at the circumstances under which this may occur.
Free Initial Telephone Discussion
For a free initial discussion on how we can help you deal with a commercial lease agreement be it the creation of a new one or extension of an existing one, get in touch with us today. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help you avoid making mistakes, saving you money and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.
What costs are tenants expected to pay?
There are certain Landlord’s costs that a tenant is expected to pay. These include:
- costs incurred in the enforcement of a tenant covenant
- the cost of serving notices under the Law of Property Act 1925 in relation to forfeiture or the breach of a covenant
- the cost of serving notice on a former tenant in respect of their obligations under an authorised guarantee agreement
- costs in preparing and serving a schedule of dilapidations
- the costs to the landlord of any applications made by the tenant for consent (e.g. assignment, sharing occupation, change of use or alterations)
Who pays for the actual lease agreement?
It used to be the case that a tenant would be liable for the costs of a commercial lease agreement but this changed in 1958 due to The Costs of Leases Act (1958).
If a tenant is to be responsible for the landlord’s costs, or vice versa, that agreement has to be made expressly in writing. Though it is now routine that a landlord and tenant pay their own costs as regards to the grant of a new lease or on any renewal, the option remains open for each party to come to a contrary agreement provided they do so in writing, such as including it in an agreement for lease or the lease itself. It often boils down a matter of negotiation and whether the prevailing market conditions favours landlords or tenants and what either or both party thinks they can get away with
It is always useful to instruct an experienced solicitor before the heads of terms between the parties are agreed. This allows a client, whether it be a landlord or tenant, to take proper advice in order to make an informed decision and avoid signing up to terms they may otherwise be completely ignorant of. In addition to rights under the Landlord and Tenant Act 1954, the cost of the grant of a new lease (or a renewal) may include such terms.
How we can help
We have a proven track record of dealing with and advising upon commercial leases. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact our Commercial Property Solicitors
It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of ensuring you do not agree to anything in a commercial lease that you come to regret.
To speak to our Commercial Property solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
Leave a Reply
You must be logged in to post a comment.