What better time is there than mid - February, just as the over-priced flowers and fluffy bears appear on shop shelves, to show some love for a much under-appreciated part of any commercial landlord or tenant’s life - the lease!
Admittedly, encouraging more love for a lease may be a bit of a stretch. But it is a document that certainly deserves more attention that it can sometimes receive.
The Importance of a Well-Drafted Lease
In some tenancy situations, a written, valid lease may simply not exist at all. When the parties are getting on well, muddling through on a laid-back basis may appear to work. But even the smallest thing – a small leak coming in from a missing roof tile, a heating system that starts to bang odd noises, delay in paying rent for a few months etc – can start to sour a relationship.
In other cases, the importance of ensuring a good, well-drafted lease is put in place may have been recognised at the outset. But that lease may then be pushed under a pile of other papers and forgotten. Prescribed rent dates may start to slide, consents required under the lease may be ignored, or even something as fundamental as the parties changing over time.
Consequences for Landlords and Tenants
Either of these situations can have consequences. For landlords, the commercial premises will be a valuable asset, both as a freehold property with value with vacant possession and as an occupied property with rental income. Ensuring the lease terms are complied with and can be enforced in the face of breach is incredibly important.
Equally, for tenants, the premises they rent will usually be a crucial part of the business. In the case of businesses where location is key, a loss of premises could be fatal to the continuation of the business.
It may be that problems with the lease (or lack thereof) can be remedied. But that may well take time, in the majority of cases lawyers will need to be involved to resolve issues – and in most cases, the costs of unpicking situations is likely to be higher than the cost of having a lease dawn up correctly and then dealing with the legalities of e.g assigning a lease, seeking consent for alterations etc properly as the lease progresses. Or, to put it another way, cutting corners in such situations to save costs is unlikely to ever save costs in the long term.
Whether you are a landlord or a tenant, dust off your lease and review it. Has the fixed term long since expired? Do you now realise that prior permission to knock down an internal wall was not obtained, that the company who has been paying your rent and has its logo above the door is not actually the tenant named on the lease? In the face of any issues, please talk to us. It is almost always easier to resolve such issues in your own time; discovering problems once relations have fallen apart, or when a landlord wants to sell/a tenant wants to leave is almost always going to be a tougher challenge.
So go on. Show some love to your lease. It will love you back if you do, I promise.