Whether you are coming to the end of your commercial lease, or looking to exercise a break option, our specialist Lease Advisory consultants will ensure your rights are leveraged, the terms of the lease are optimised and your costs are minimised.
Whether advising institutional or private investors, landlord or occupier clients on lease issues, our focus is always on helping clients achieve their financial goals.
Because of the complexity and importance of managing landlord-tenant relationships within a legal and commercial context, our Lease Advisory team only comprises experienced consultants with deep technical and market knowledge of the commercial property sector.
How we can help
Our Lease Advisory service includes:
- Rent reviews
- Lease renewals (inside and outside the 1954 Act)
- Alternative dispute resolution (independent expert arbitration or mediation)
- Lease advice
- Lease extension advice
- Lease restructures
- Expert witness
As commercial property specialists, our Lease Consultancy specialists operate as an integral part of a multidisciplinary team – which includes experts in Agency (Acquisition and Disposal of property assets), Business Rates, Building Consultancy, Investment and Valuation.
Why choose Matthews & Goodman?
With more than 150 years of experience of the UK property market, you can rely on us to help you find the right solution to your lease issues. Our expertise extends across a range of sectors, including offices, industrial and logistics, retail, residential, healthcare, public sector, licensed, leisure and hotels.
Because our Lease Advisory team only comprises of lease specialists, we are able to offer advice based on informed market knowledge and a thorough understanding of contract terms and legislation.
We always ensure that our clients’ interests are protected and that they are able to secure the best possible chance of achieving their desired outcome, whilst minimising their costs and liabilities.
Exiting a commercial lease
In cases where continuing occupation of a commercial premises is no longer viable, you will have to negotiate the surrender of your lease with your landlord and agree an exit strategy. There are certain things expected of you before an exit can take place. This can include break clauses, early termination options and dilapidations.
If you are moving permanently from your current property, you will need to settle your dilapidations bill. Dilapidations refer to the repairs required to return a property to the condition it was in at the start of the lease. This could be a timely and costly process, impacting on your ability to move.
Our team of Building Consultants can review your dilapidations bill to ensure the costs are fair, by checking them against your lease obligations and providing an independent quote for the work required. We can also help you appreciate the full implications of the dilapidation clauses in your new lease, to ensure they are reasonable and fair.
Renewing a commercial lease
As a commercial lease comes to an end, the renewal process can be initiated by either the landlord or the tenant, by way of a Section 25 Notice (for landlords) or a Section 26 Notice (for tenants).
During this time, both parties may review the current agreement to ensure that there is a viable justification for any amends to be made in the terms and conditions, including rental payments and break clauses.
We have a proven reputation of advising clients during the negotiation period to help them achieve the best possible deal - before signing a new agreement. This includes reviewing any proposed changes by the landlord, to ensure they are reasonable and fair in the current market.
Most lease contracts include a clause which allows a rent review to take place after a certain period of time. Reviewing the current rent charges and adjusting it accordingly allows landlords to benefit from the uplift in market value, experienced by property and its surrounding area.
However, tenants could use a rent review to their advantage by using the regular break clauses to negotiate more favourable lease terms.
Our Lease Advisory consultants will work with you to ensure your rent review runs smoothly and efficiently to ensure that:
- Landlords can optimise their property’s profitability
- Tenants do not miss ‘lease event’ dates, resulting in the increased liability of rent being backdated to the rent review date.
A poorly executed rent review can be expensive and both parties might fail to reach a mutually agreeable resolution. At worst, it could lead to the dissolution of a commercial contract therefore, it is critical you seek professional advice when navigating this process.
If an agreement cannot be reached, a third-party (independent) expert is usually called in to arbitrate.
Contact us today for informed, independent and impartial advice on lease-related matters.
Coming to the end of your lease, or re-thinking your workplace? What are your options? Use our online tool to find out if you should stay in your current office, or look elsewhere.
It is important to review a lease agreement thoroughly before agreeing to any terms, as it might result in you being trapped in an agreement which could prove expensive and unworkable for you.
Below are a few terms you should be aware of in a commercial lease agreement:
- Rent reviews - these tend to be every three to five years and can alter the amount of rent you pay. However, the frequency of reviews are open to negotiation, so be careful you are not subject to too many during your lease period
- Repairs and insurance - most leases are described as ‘fully repairing and insuring’ leases (or FRI leases). This means you are responsible for repairing and insuring the premises; however, some clauses may increase the tenant’s responsibility
- Lease terms - make sure the lease length coincides with your short and long-term business plans, especially if there are restrictions in place which prevent you from breaking, assigning or underletting the lease
- User clause - check for clauses which specify how you use a building; for example, if your lease states that the property can only be used for office space, and you turn it into a restaurant, you may be in breach of contract
- Break clause - make sure your agreement includes a break clause which clearly outlines how to terminate an agreement early. Many tenants assume they have the right to terminate at any time however, there may be a ‘no-break’ clause in the agreement
- Assignment and subletting - check for any restrictions in assigning or subletting a lease in the agreement, as you may be in breach of contract if these are not permitted in your lease contract
- Energy efficient standards - check what the energy standards are for the property, and if they are low, what work needs to be carried out to make it fit-for-purpose. It is unlawful for landlords to grant a new lease on properties with a rating below E
When a tenant breaches the terms of a commercial lease, landlords can serve a Section 146 notice on him/her. If tenants fail to remedy their breach, either through reparations or meeting the breached term, they could be open to repercussions, such as damage payments, legal costs or forfeiture of the lease.
Common tenant breaches include:
- Failure to keep the property insured
- Failure to maintain or make repairs to the property
- Unauthorised use of the property
- Unlawful sharing of the property
When a landlord breaches their obligations in a commercial lease, tenants can take legal action that requires the landlord to make repairs to the property, pay reparations or terminate the lease allowing a tenant to find other premises.
Common landlord breaches include:
- Failure to repair the property in line with the lease terms
- Failure to pay for insurance or services outlined in the lease
- Use of the property without the tenant’s consent
- Attempting to enter the premises without consent while it is occupied
- Attempting to evict the tenant without just cause or without following the correct procedure