Create a commercial lease agreement

As part of commercial conveyancing, creating a commercial lease is a complex process that requires careful legal attention to protect the interests of both landlords and tenants. 

Commercial leases are governed by strict regulations, making it essential to work with a solicitor when drafting the agreement. 

Solicitors ensure that the lease is legally compliant, clearly written, and customised to suit the unique needs of the commercial property.

Our commercial lease solicitors can help you transfer your leases in England and Wales, no matter where you are located.

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1. Initial consultation with a solicitor

The first step in creating a commercial lease is to liaise with a solicitor. 

He will gather key information about the commercial property but also the terms you wish to include in the lease.

A commercial lease includes:

• Property details: Location, type of business.
• Rent and payment structure: Monthly or quarterly payments, rent reviews, and service charges.
• Lease duration: Preferred lease term, including any break clauses for early termination.
• Repair obligations: Clarifying who is responsible for repairs, especially in Full Repairing and Insuring (FRI) leases.
• Other terms: Permitted use, subletting restrictions, and tenant alterations.

This consultation sets the foundation for a lease that fits the specific needs of both the landlord and tenant.

2. Drafting the commercial lease

Once the solicitor understands all your requirements, they will start drafting the lease. This is where the real benefit of using a solicitor comes into play. 

Instead of using a generic template, the solicitor will tailor the lease to the agreed-upon terms and ensure it complies with UK law.

3. Reviewing and negotiating the terms

After the initial draft is completed, both the landlord and tenant (with their respective solicitors) will start reviewing the lease.

This stage is important for identifying any concerns, clarifying terms, and negotiating changes. 

Solicitors play a key role in this phase by ensuring that the lease is fair, legally sound, and meets the needs of both parties.

Usually, negotiating commercial lease terms includes:

• Rent increases: Clarifying how rent reviews will be conducted; they are often tied to market rates or inflation.
• Break clauses: Adjusting the timing or conditions of break clauses, offering more flexibility if needed.
• Repairs and maintenance: Ensuring that responsibilities are balanced fairly between tenant and landlord.

4. Finalising and signing the commercial lease

Once both parties have agreed on the final terms, the lease is ready to be signed.

At this stage, your solicitor will ensure that everything is in order, including any required notices or additional documentation. 

For longer leases, the solicitor may also need to register the lease with the HM Land Registry.

Both landlord and tenant will sign the lease in the presence of their solicitors, who will witness the agreement.

If applicable, the solicitor will handle the submission of SDLT to HM Revenue and Customs.

A solicitor specialising in commercial property law can offer several key advantages:

• Legal expertise: Solicitors are well-versed in property law, including the Landlord and Tenant Act 1954, Stamp Duty Land Tax (SDLT) regulations, and other legal requirements.
• Custom drafting: They will create bespoke leases that reflect the specific terms agreed upon by the landlord and tenant, avoiding the pitfalls of generic templates.
• Risk mitigation: Solicitors can identify and prevent potential issues that could lead to disputes, ensuring that both parties understand their obligations clearly.
• Compliance: Solicitors ensure the lease adheres to all current legal standards, including any required registrations and notices.

Commercial conveyancing fees will vary depending on the cost of the property involved and the complexity of the transaction. 

Legal fees

The cost of paying for commercial conveyancing solicitors - are the biggest element of the overall cost of a commercial conveyancing transaction. 

For a straightforward lease the legal fees will cost around £800-£1500

Disbursements

Disbursements are costs that the solicitor pays on your behalf to third parties. They typically include:

• Land registry fee: Depending on the property value it will cost £20-£910. 
• Search fees: It includes Local authority searches, environmental searches etc.. and will cost £400-£500.
• Stamp duty land tax(SDLT): Calculated based on the value of the commercial lease.

The total cost to except for a commercial lease will range from £1000 to £2000, including VAT and disbursements

At Homeward Legal, we offer a no-obligation quote from trusted and experienced commercial conveyancing experts that includes fixed legal fees. That ensures the quote you receive for legal fees is exactly what you pay, with no hidden costs. 

You can also learn more about conveyancing fees in our guide.

If you need help in creating a commercial lease agreement, get in touch with the team today about our commercial conveyancing services by filling the form below.

Alternatively, you can always give us a ring on  and we'll be happy to speak to you.