Lease checklist
When you’re thinking of renting or buying property for business use, it’s useful to have a checklist. It’s also worth asking a legal professional to check any lease agreements before you sign – there might be issues it doesn’t cover that you’ll want to be aware of.
Things to consider include:
- What type of rental agreement is on offer – lease or license?
- How much is the rent and business rates for the property? When and how are these to be paid?
- What is the length of notice for terminating the lease?
- The types of insurance you will need – for example buildings, contents, additional equipment and public liability insurance.
- Does the building meet fire and health and safety regulations?
- Does the building meet disability access requirements?
- What is the security situation? You may also want to familiarise yourself with the area – is it safe at different times of the day?
- Are there maintenance services (internal and external) built into the lease?
- Is there a connected phone line or internet access? Is that something you’d like to negotiate with the landlord as part of the leasing agreement?
- Does the property have the right classification of use (eg business, shop, storage) for your business?
- Are utilities (gas, electric, water, phone, communication lines) included?
- Are there up to date gas and electrical safety test certificates?
- Can you access the building whenever you like or are there restrictions?
- What improvements or upgrades are you allowed to carry out in the property?
- What are the dilapidation responsibilities when you leave the property?
- Are there limitations regarding the number of users of the property (or on sub-leasing)?
Definitions
A key to some common terminology related to property, shown in the order they’ll normally appear in a lease:
- Tenant (or lessee) – the person allowed to use a house, building or land for a period of time in return for payment to the owner
- Landlord (or lesser) – the owner of a property rented or leased to another individual or business
- Licensee – the person who occupies the property
- Licensor – the owner of the property
- Lease – a legal document and rental agreement between a tenant (lessee) and a landlord (lessor)
- Leasehold interest – the right to exclusive possession and use of an asset or property for a stated definite period, as created by a written lease
- Term of lease – length of lease which can be fixed, periodic or indefinite
- Tenancy – the relationship between the landlord and tenant
- Fixed-term tenancy – a tenancy which lasts for a fixed period of time
- Periodic tenancy – a tenancy which lasts sporadically (eg from week to week, month to month etc)
- Tenancy at will – a tenancy the landlord can terminate at any time by giving notice, and which lasts as long as both parties want it to.
- Tenancy at sufferance or holdover tenancy – the period when a tenant remains in possession of a property outwith the period of the lease, and is (technically) trespassing.
- Rent – the money exchanged for the lease of a property
What next?
Here are some links to further information, including our Property Planning Worksheet. They’ll help clarify where you are with your planning.
