Agreements for Lease of Commercial Property
Agreements for Lease are used to commit a Landlord and a Tenant to entering into a Lease of Business Premises at some point in the future. They are used when the parties are not yet in a position to complete a Lease but want some contractual certainty that a Lease will be put in place when the circumstances permit.
Situations in which a Landlord and Tenant might enter into an Agreement for Lease include where:
- the premises are not yet available (the previous tenant may still be there);
- the premises are not ready for occupation (building work may be required);
- a third party consent is required (such as planning consent, a superior landlord’s consent or mortgagee’s consent).
Our template Agreements for Lease cover various situations, from a straightforward agreement to grant the lease on a fixed date to agreements where completion of the lease is conditional on other factors. We also have an Agreement for Underlease which is conditional on the Superior Landlord consenting to the grant of the Underlease.
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Frequently Asked Questions
The premises are not ready yet but we have agreed a deal. How do we lock it in before the lease starts? +
Use an agreement for lease. It binds landlord and tenant to complete a lease later, when a condition is met, for example building works finish, a previous tenant leaves or planning or a superior landlord's consent comes through. It gives both sides certainty in the meantime. This sub-folder has agreements for lease for several situations.
Is an agreement for lease legally binding? +
Yes, if it is done properly. As a contract to dispose of an interest in land it must be in writing, contain all agreed terms in one document and be signed by both parties, under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Once signed, neither side can walk away without being in breach. This sub-folder's agreements are drafted to comply.
Can completion of the lease depend on conditions like planning or building works? +
Yes. A conditional agreement for lease makes completion depend on defined conditions, such as obtaining planning permission, finishing landlord's works or getting a superior landlord's or mortgagee's consent, with longstop dates if a condition is not met. This sub-folder ranges from a simple agreement to grant on a fixed date to fully conditional agreements.
If I want to grant an underlease, do I need my own landlord's consent first? +
Usually yes. Where your lease requires the superior landlord's consent to underlet, you should make the deal conditional on getting it. This sub-folder includes an agreement for underlease that is conditional on the superior landlord consenting, so you are not committed to the undertenant before your own landlord agrees.
Should the lease itself be inside or outside the 1954 Act, and where is that recorded? +
Decide before you sign the agreement for lease. If the lease is to be contracted out of the Landlord and Tenant Act 1954, the warning notice and tenant declaration must be dealt with before the agreement for lease binds the tenant, not just before the lease. The agreement should annex the agreed form of lease. This sub-folder's conditional agreements accommodate this.
