Agreement for Lease – Unconditional Version
This Agreement for Lease – Unconditional Version is for use where a Landlord and Tenant have agreed in principle to enter into a Lease of Commercial Property but are not in a position to grant the Lease yet. The Agreement for Lease creates a binding contract to enter into the Lease on a specified date in the future.
The Agreement for Lease could be used where, for example, the Landlord and Tenant are negotiating a Lease to start on 1 July. They want to commit contractually to the Lease before that date but the Lease cannot be granted because the current tenant’s Lease has not yet expired. The Landlord and Tenant can use an Agreement for Lease to give them the certainty that the Lease will be granted on 1 July.
This is a very simple form of Agreement for Lease. We have other versions for different scenarios.
The form of Lease must be agreed and a copy of it attached to the Agreement before the Agreement is signed.
Clause 1 contains the agreement to enter into the lease on the defined Completion Date. The Agreement is personal to the Tenant (i.e. the benefit cannot be assigned to another person). If the Landlord sold the Property, the Agreement would be binding on the buyer (i.e. the buyer would have to grant the Lease to the Tenant).
Clause 2 incorporates the Standard Commercial Property Conditions (Third Edition) in the Agreement. These Conditions are widely used in Commercial Property transactions (and are similar to the Standard Conditions of Sale used for residential conveyancing). A copy of the Standard Conditions is available from the Oyez legal stationers website. Unfortunately we are not able to supply the Standard Conditions.
Clause 3 deals with completion of the Lease and sets out any payments the Tenant must make, for example the first instalment of rent.
Clause 4 covers exclusion of security of tenure. If the Lease is to be granted without security of tenure, the exclusion procedure must be completed before the Agreement for Lease is entered into. More information is available in the Guidance on Excluding Security of Tenure and the associated forms.
Clause 5 relates to VAT. It requires the Tenant to pay any VAT that is chargeable on the rent.
Clause 6 contains standard legal wording including a clause about notices.
The Agreement needs to be signed by each party at the end. The Landlord and Tenant may sign the same copy or one copy each.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This Agreement for Lease – Unconditional Version is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
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