Lease of Garage or Workshop

This is a template lease of a garage or workshop, for letting to a business tenant for a term of five years or less. It is designed for self-contained premises where the landlord does not provide any services. Because the term is short, the lease includes no rent review provisions, and the tenant's right to security of tenure is excluded (reference should be made to the Guidance Note on excluding security of tenure). Assignment of the whole lease is permitted, but underletting is prohibited, and the lease includes optional break clauses.

Which lease do I need?

The Lease of Garage or Workshop is one of a number of five-year leases for industrial premises:

• Lease of Self-Contained Industrial Unit
• Lease of Self-Contained Industrial Unit (Complies with Lease Code)
• Lease of Garage or Workshop
• Lease of Garage or Workshop (Complies with Lease Code)
• Lease of Industrial Unit on an Estate
• Lease of Self-Contained Warehouse or Storage Unit
• Lease of Self-Contained Warehouse or Storage Unit (Complies with Lease Code)
• Underlease of Part of Industrial Unit on an Estate

There are also leases of other types of property and leases with longer terms. If you are not sure which lease is right for you, consult the Industrial Leases Comparison Matrix.

Prescribed clauses, guarantor and plan

This lease has Land Registry Prescribed Clauses at the beginning. These are not strictly necessary for a lease with a term of less than seven years, but they are included because they helpfully record the main terms.

Prescribed Clause LR3 includes a field for an optional guarantor. If there is no guarantor, this field can be left blank and clause 10 (guarantor's covenant) should be deleted.

Prescribed Clause LR4 makes optional reference to a plan. It is strongly recommended that a plan is included so the extent of the property is clear. As a minimum, the plan should show the property being leased to the tenant edged in red. It may also need to show any areas over which rights are granted to the tenant in the First Schedule, where these cannot be adequately described in words.

Permitted use and Use Classes

Clause 1 contains definitions. The definition of "Permitted Use" refers to Use Classes that now differ between England and Wales. For a property in Wales, the definition refers to Use Classes B1, B2 and B8: offices, research and development and light industrial uses (B1), general industrial uses (B2), and storage and distribution (B8). Class B1 no longer exists in England: since 1 September 2020, those same uses (offices, research and development and light industrial) fall instead within Class E(g), so for a property in England the definition refers to Use Classes E(g), B2 and B8. A surveyor will be able to advise on the uses that should be permitted under the lease.

Rent, covenants and the landlord's obligations

Under clause 2, the landlord grants the lease to the tenant. The tenant must pay the rent and an insurance rent, to reimburse the landlord's buildings insurance premium.

Clause 3 contains the tenant's covenants, covering matters such as payment of utility charges, repair, decoration, safety, the landlord's rights of entry, use, alterations, alienation (assignment and underletting), indemnity and payment of the landlord's costs.

Clause 4 contains the landlord's covenants, covering quiet enjoyment (the tenant's right to use the premises without interference from the landlord) and insurance.

Clause 5 contains various standard lease clauses, including forfeiture and suspension of rent if the premises are damaged so as to be unfit for use.

Clause 6 deals with service of notices by the landlord and tenant.

Break clauses and ending the lease early

Clauses 7 and 8 contain optional break clauses (termination rights) for the landlord and tenant. These should be amended or deleted as appropriate. The tenant's break option is conditional on rent having been paid up to date, the tenant giving up possession of the premises (vacating), and the tenant not leaving any underleases in place. If these conditions are not satisfied, the tenant's break will not be effective and the lease will continue. If the tenant is in breach of other terms of the lease, for example where necessary repairs have not been carried out, the break will still be effective but the landlord will retain the right to sue the tenant for any breaches of the lease.

Security of tenure, schedules and execution

Clause 9 deals with exclusion of security of tenure. It is important that the correct procedure is followed when excluding security of tenure. Reference should be made to the Guidance on Excluding Security of Tenure and the associated forms.

The lease must be executed as a deed. Various types of execution clause are included, and the parties should choose the ones appropriate to their circumstances.

The First Schedule sets out the rights the tenant has to use other property. These rights should be checked carefully and amended or deleted to suit the circumstances.

The Second Schedule sets out the rights the landlord has in respect of the premises, including rights of entry and the right to carry out work to neighbouring property. Any additional rights required should be added to the Second Schedule.

The Third Schedule sets out regulations the tenant must comply with. Under clause 3.1.30, the landlord has the right to make further regulations from time to time for the better management and control of the premises.

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