Template Agreement for Lease Conditional on Obtaining Consent for a Change of Use

Agreement for Lease Conditional on Change of Use Consent

PROP.MAN.71
This Agreement for Lease Conditional on Change of Use Consent allows a Landlord and Tenant to agree that a Lease of Commercial Property will be entered into once the Tenant has obtained Planning Consent for a Change of Use of the Premises. This Agreement should be used where the use of the Premises authorised under Planning Law is not suitable for the Tenant’s proposed use.

We have other template Agreements for Lease for different scenarios including Unconditional, Conditional on Consent to Underlet and Agreement with Landlord’s Works.

The form of Lease must be agreed and a copy of it attached to the Agreement before the Agreement is signed. The parties may also wish to agree and attach the Tenant’s draft Planning Application for the Change of Use. Alternatively, the Planning Application can be approved by the Landlord at a later date.

The Agreement refers to various dates. The Target Date is the date by which Planning Consent should have been obtained. If Planning Permission has not been granted by the Longstop Date either party may terminate the Agreement (and the Lease will not be granted). The Completion Date, when the Lease is completed, is five working days after the grant of Planning Consent.

Clause 1 contains provisions relating to the Tenant’s Planning Application, including timescale.

Clause 2 contains the agreement to enter into the lease on the Completion Date, assuming that Planning Permission for Change of Use has been granted. 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 3 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 4 deals with completion of the Lease and sets out any payments the Tenant must make, for example the first instalment of rent.

Clause 5 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 6 relates to VAT. It requires the Tenant to pay any VAT that is chargeable on the rent.

Clause 7 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 Conditional on Change of Use Consent is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

Once you have purchased access to the appropriate document folder click on the “Download Document” button below. You will be asked what you want to do with the file. It is recommended that you save the document to a location of your choice prior to viewing.
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