Leasing & Letting

Question 1

What are the objective of the Code of Leasing Business Premises 2020?

Answer 1

• To make negotiations collaborative and constructive
• To fairly balance the needs of both parties in negotiations
• To make unrepresented parties aware of the code
• To produce clear Heads of Terms marked STC, to aid legal drafting

Question 2

What is in the code?

Answer 2

1) Introduction
2) Mandatory Requirements
3) Lease negotiations best practice
4) Appendices

Question 3

What is listed in the appendices?

Answer 3

1) Model HoTs
2) Additional guidance for LL & T
3) Practical guidance for both parties

Question 4

What is important when selecting a tenant?

Answer 4

Tenant covenant - rent deposit, review bank statements, profits test

Question 5

What are the lease terms that can impact value?

Answer 5

• Restrictive user clause
• Lease length
• Rent review frequency
• Repairing obligations

Question 6

What is a break clause?

Answer 6

A right (time of the essence) for the tenant (and sometimes the landlord) to end the agreement before lease expiry.

Question 7

What are the typical conditions within a break clause?

Answer 7

• Vacant possession
• Everything paid
• Tenant compliance with covenants

Question 8

What happens if the lease is silent on alienation?

Answer 8

The tenant can assign/sub-let without Landlord consent

Question 9

What happens if there is no alienation clause in a lease?

Answer 9

The tenant can assign the lease without consent

Question 10

When were the use classes last updated? What are the new use classes?

Answer 10

E - Retail, restaurant, professional services
B2 - Industrial
B8 - Storage/distribution
C - residential
Suis Generis