1. Rent Review Clauses
- Fixed Dates: Ensure rent review dates are clearly stated (e.g., every 5 years).
- Deadline to Initiate: Look for a clause that limits how long the landlord has to start the rent review (e.g., within 6 months of review date).
- Expiry Clause: Prefer leases that say if the review isn’t done in time, it lapses.
- Valuation Basis: Confirm rent must reflect the market on the review date, not when it’s reviewed later.
- Interest on Shortfall: Avoid clauses that allow the landlord to charge interest on backdated rent shortfalls.
2. Break Clauses
- Notice Period: Be clear on how much notice is needed to end the lease early.
- Method of Service: Watch how notice must be given (by post? recorded delivery?).
- Conditions: Some break rights are only valid if all rent is paid or no breaches exist - avoid overly strict break conditions.
3. Repair Obligations
- Full Repairing Lease (FRI): These can make tenants responsible for all repairs, even for pre-existing damage. Try to limit this or schedule a condition survey.
- Schedule of Condition: Attach this to the lease to avoid being liable for poor conditions you inherited.
4. Service Charges
- Cap on Charges: Negotiate a maximum limit or cap on what you might have to pay yearly.
- Transparency: Ask for breakdowns of how charges are calculated and what they cover.
5. Use and Alterations
- Permitted Use: Check that your business activity is allowed under the lease.
- Alterations: Make sure you’re allowed to make internal changes (e.g., signage, layout) with landlord consent, ideally not unreasonably withheld.
6. Forfeiture / Termination
- Grace Periods: Check if there's a grace period before the landlord can terminate the lease for missed rent.
- Section 146 Notices: Understand when and how the landlord can serve notice of breach.
- Relief from Forfeiture: Know your rights to apply to court if a forfeiture notice is served.
7. Alienation (Assignment/Subletting)
- Can You Assign/Sublet?: Make sure you're allowed to transfer or sublet the lease if needed and that conditions are fair.
- Personal Guarantees: Avoid or limit personal liability if assigning the lease to someone else.
8. Legal Traps
- Exclusion of Security of Tenure: This means you don’t have the right to renew the lease when it ends unless the landlord agrees.
- Hidden Penalties: Watch for clauses like automatic rent increases or legal/agent fees if late on rent.
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