Drafting Commercial Leases - A Practical Introduction in One Day

Introduction

This full day in-person course is designed to give you a solid grounding, from heads of terms stage, through to drafting the lease itself, to completion and beyond. It will help you understand what needs to be in a commercial lease, why those provisions are important and the differing priorities of the landlord and the tenant when the lease is being negotiated.

In addition to looking at the legal issues, we examine the drafting of the lease to explore why the lease provisions say what they do and what drafting compromises can be proposed.

Only too often lease drafting is dealt with in isolation and does not take into account the real world. We will emphasise the importance of understanding the extent of the demise and the needs of the landlord and tenant on the ground.

It is aimed at junior commercial property lawyers and paralegals. It is also relevant for surveyors who wish to deepen their understanding of commercial lease issues.

What You Will Learn

This course will cover the following:

• Standard forms of lease - including the Model Commercial Lease, PLC, Lexis PSL, RICS, Law Society
• RICS Professional Statement Code for leasing business premises Jan 2022 and its model heads of terms
• 1954 Act - Inside or out? How a lease that's inside the Act may fall outside of it later, what could the effect be on the tenant's business?
• Contracting out of the 1954 Act
• Leases of part - issues to consider
• What is an ‘FRI’ or an ‘institutional’ lease?
• The importance of agreeing the area for rent review purposes
• Parties to the lease - making sure the lease is valid
• Extent of the demise - what's included - structure/non-structural boundaries?
• The importance of accurate plans
• Rights & reservations - don't forget to make the lease correspond to the real world - fire escapes, atriums, common parts, service bays, parking
• Term - Interpreting dates; issues to consider with lease lengths; registration of the lease
• Break clauses - traps to beware; making sure it can be exercised; the conditional break trap; what rent to pay; the apportionment trap. What does the Lease Code recommend?
• Rent(s)
• Rent review - how an open market rent review is calculated; alternatives to open market review
• Insurance - including flood and uninsured risks; rent suspension
• Repair and redecoration - alternatives to ‘full repair’; spotting the gaps; standard of repair; Jervis v Harris clauses; landlord's repairing obligations
• Green lease clauses - what they are and why they matter. Light green or dark green?
• EPCs and MEES - vital issues to consider post April 2023
• Outgoings
• Service charge - what does it cover; protections for the tenant; RICS service charge code
• Alienation - assignment/underletting; preconditions; consents; AGAs; GAGAs; sharing occupation; group companies
• Alterations - what can and can't be done? Practical issues to consider
• Signage
• Permitted use - planning ahead - The new Class E & Permitted development rights
• Exclusivity issues; competition law considerations
• ‘Keep open’ clauses & COVID
• Yielding up - the interaction of dilapidations, the definition of the demised premises and the repairing covenant
• Landlord's covenants
• SDLT, Land Registry and other post completion issues
• Deeds of variation post completion of the lease? Avoiding the surrender and regrant trap