5 Common Pitfalls in Commercial Leases
Navigating the complexities of London commercial property agreements without falling into expensive legal traps.
Introduction: The Myth of the 'Standard' Lease
In the fast-paced London commercial property market, tenants are often presented with a "standard form" lease. At Thames Draftworks, we consistently find that these documents are heavily weighted in favor of landlords. What appears to be a routine agreement often contains hidden obligations that can cripple a business's cash flow years down the line. Professional meticulousness at the signature stage is your only true protection.
1. Repair Obligations: 'Keep' vs. 'Put'
A single word can change your financial liability by tens of thousands of pounds. If your lease requires you to "keep the premises in good and substantial repair," you are legally obligated to hand back the property in that state, regardless of its condition when you moved in. Essentially, you may be paying to fix 20 years of wear and tear caused by previous tenants.
2. Break Clauses: The Precision Trap
A break clause provides the flexibility to exit a lease early, but they are often drafted with "conditions precedent" that are nearly impossible to satisfy. Missing a notice period by 24 hours or failing to pay a minor interest charge on late rent can invalidate your right to break, locking you into a long-term commitment you can no longer afford.
3. Rent Review Mechanisms
Most commercial leases contain "Upward Only" rent reviews. However, the pitfall lies in the Open Market Value definition. Without precise drafting, you might find yourself paying rent based on a theoretical "best-case scenario" for the landlord, rather than the reality of your specific floor space or usage restrictions.
Why Professional Review is Essential
Commercial leases in the UK are not subject to the same consumer protection laws as residential tenancies. Once you sign, you are bound by the terms strictly. Our team at Thames Draftworks ensures every clause is interrogated to protect your operational freedom and financial stability.
Secure Your Business Future
Don't sign a lease until it's been reviewed by the experts at Thames Draftworks. We provide meticulous document review and negotiation support across London.
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