Pre-Contract Business Lease Documents
A commercial lease transaction is likely to run much more smoothly if the Landlord has done appropriate preparatory work before issuing the draft lease.
These Pre-Contract Business Lease Documents include detailed Heads of Terms templates to enable the Landlord and Tenant to agree points of principle at an early stage. There is also an Application Form which seeks to capture all the information a Landlord needs in order to carry out credit checks and obtain references for the Tenant. A selection of template Letters requesting References also appears in this subfolder.
- Guidance Notes: Business Tenancy Agreements
- Lease/Licence Distinction Flowchart
- Business Lease Heads of Terms
- Underlease of Whole Heads of Terms
- Underlease of Part Heads of Terms
- Licence to Occupy Heads of Terms
- Tenancy at Will Heads of Terms
- Licence to Occupy Commercial Premises
- Tenancy at Will for Commercial Premises
- Application Form for a Business Lease
- Reference Request Form - Previous Commercial Landlord
- Letter Requesting Reference from Business Tenant’s Bank
- Letter Requesting a Reference from the Guarantor’s Bank
- Letter Requesting a Character Reference for a Commercial Tenant
- Letter Requesting a Personal Reference for a Guarantor
- Letter to Lender requesting Consent to Let Commercial Property
Pre-Contract Business Lease Documents is part of Property. Just £38.50 + VAT provides unlimited downloads from Property for 1 year.
Frequently Asked Questions
I have found a tenant for my commercial unit. What should I agree before instructing solicitors?
Settle heads of terms first. These record the key commercial points, rent, term, break dates, repairing obligations, rent review and whether the lease is inside or outside the 1954 Act, so both solicitors draft from the same deal. Heads of terms are usually marked subject to contract so they do not bind you yet. This sub-folder has heads of terms templates.
How do I check a prospective commercial tenant can afford the rent?
Take references and run checks before you commit. Use an application form to capture the tenant's trading history, bank and accountant details, trade references and previous landlord, then write to those referees. If the covenant looks weak you can ask for a guarantor or a rent deposit. This sub-folder has the application form and reference request letters.
Should my new commercial lease be inside or outside the Landlord and Tenant Act 1954?
Decide this at heads of terms stage. Inside the Act the tenant gets security of tenure and a right to renew at the end of the term. Outside the Act, contracted out under section 38A, the tenant must leave when the term ends. Contracting out needs a warning notice and a tenant declaration before completion, so record your choice early.
Do heads of terms legally bind me to grant the lease?
Not if they are marked subject to contract, which is standard. A contract for a lease is only binding if it is in writing, contains all the agreed terms in one document and is signed by both parties under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Subject to contract heads of terms let either side walk away until the lease or an agreement for lease is signed.
Can I ask a prospective tenant for a guarantor?
Yes. If the tenant is a new company, has a weak trading record or thin accounts, you can require a guarantor to stand behind the lease obligations, or ask for a rent deposit instead or as well. Agree this in the heads of terms so it is built into the draft lease. This sub-folder helps you gather the financial information to make that call.