So you’ve found a property you want to lease, what next?
Step 1 – Once you have viewed the property and decided you would like to proceed the first step is to make an offer to the agent, it is preferential for you to make the offer in writing (an email is fine). Points to confirm in your offer include – lease length, rent payable, rent deposit, any break clauses, rent reviews or rent free period, what you will be using the property for, name you will be taking the lease in and any other lease terms. The agent may request references from you at this point.
Step 2 – Negotiate with the agent to come to a mutual agreement between yourself (tenant) and the landlord in order to agree Heads of Terms.
Step 3 – The agent will circulate Heads of Terms to the solicitors.
Step 4 – The landlord’s solicitor will begin drafting the lease and will contact the tenant’s solicitor with a draft copy for review.
Step 5 – The tenant’s solicitor will review the documents and respond to the landlord’s solicitor with any amendments/queries. CPSE’s may also be sent to the landlord’s solicitor to complete. These are standard commercial property queries to be answered by the landlord.
Step 6 – Once the lease is agreed the final copies will be sent out for engrossment (signature). At this point the tenant should put their solicitor in funds (send over any rent, service charge, deposit etc) due for completion.
Step 7 – The solicitors will complete the lease! Once completed the tenant can collect the keys from the agent and start occupying the property.
Technical Terms
Heads of Terms – a document which the agent will prepare which sets out what has been agreed between both parties. This is sent to the solicitors and used as the basis on which they draw up the lease.
Rent free period – Set amount of time normally at the start of the lease where no rent is payable. Often in exchange for the tenant undertaking some work to the property.
Break clause – Option at a specific point within the lease for the tenant to serve notice to the Landlord to bring the lease to an end and leave the property (usually with 6 months prior written notice).
CPSE’s – Commercial Property Standard Enquiries. A series of standard questions about the property – similar to enquiries you might receive when selling/buying a house.
