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Office Leases & Licences

Office Long Leases for more than Five Years

Most office premises are occupied under a Lease. A Lease gives the Tenant exclusive use of the premises for a specified term, subject to the Tenant paying the rent and complying with the provisions of the Lease. 

This subfolder of Leases for more than five years contains a selection of templates for lettings of office premises. There are Leases of part (with service charge), Leases of whole and an Underlease. All of the Leases contain rent review provisions as well as detailed covenants as to what a tenant must and must not do during the term. These provisions aim to protect the value of the Landlord’s reversionary interest in the premises.

A comparison matrix is available to help you decide which Lease is most suitable for your purpose.

Office Long Leases for more than Five Years is part of Property. Just £38.50 + VAT provides unlimited downloads from Property for 1 year.

Frequently Asked Questions

Why does a longer office lease need a rent review clause? +
Because a rent fixed today will fall behind the market over a term of ten or fifteen years. A rent review clause lets the rent be adjusted at set dates, most often upward only to open market value. The Simply-Docs long office leases of more than five years include review provisions, unlike the short lease templates. Get the mechanism right at the outset: the review dates, the valuation basis and how disputes are settled all affect the rent you can charge later.
Do I have to register an office lease granted for ten years? +
Yes. A lease granted for a term of more than seven years must be registered at HM Land Registry, and a ten year office lease is well over that limit. Until it is registered the grant takes effect only as an equitable interest, which gives the tenant weaker protection and complicates any later sale or assignment. The tenant is normally responsible for registering within the priority period and paying the fee.
How much Stamp Duty Land Tax will my tenant pay on a long office lease? +
SDLT on a new commercial lease is charged on the net present value of the rent over the whole term, not on the yearly rent, so a longer term produces a larger figure. There is no SDLT on the rent while the net present value stays under £150,000, then 1% on the slice above that. Any premium is taxed separately at non-residential rates. In Wales the equivalent is Land Transaction Tax with its own bands. Use the HMRC or Welsh Revenue Authority calculator for the exact sum.
Does a long office lease give the tenant the right to renew when it ends? +
Yes, unless it was contracted out. A lease within Part II of the Landlord and Tenant Act 1954 gives the tenant security of tenure, so at the end of a long lease the tenant can stay and apply for a new one, and you can resist only on a section 30 ground such as redevelopment or your own occupation. If you want the office back with certainty, the lease must be contracted out before it is granted using the warning notice and declaration procedure.
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