A Code of Practice for Commercial Leases in England and Wales

Negotiationg a Business Tenancy (Lease)

Recommendation 1; Renting premises:

Both landlords and tenants should negotiate the terms of a lease openly, constructively and considering each other's views.

Recommendation 2; Obtaining professional advice:

Parties intending to enter into leases should seek early advice from property professionals or lawyers.

Recommendation 3; Financial matters:

Landlords should provide estimates of any service charges and other outgoings in additions to the rent. Parties should be open about their financial standing to each other, on the understanding that information provided will be kept confidential unless already publicly available or there is proper need for disclosure. The terms on which any cash deposit is to be held should be agreed and documented.

Recommendation 4; Duration of lease:

Landlords should consider offering tenants a choice of length of term, including break clauses where appropriate and with or without the protection of the Landlord and Tenant Act 1954. Those funding property should make every effort to avoid imposing restrictions on the length of lease that landlords, developers and/or investors may offer.

Recommendation 5; Rent and value added tax:

Where alternative lease terms are offered, different rents should be appropriately priced for each set of terms. The landlord should disclose the VAT status of the property and the tentant should take professional advice as to whether any VAT charged on rent and other charges is recoverable.