Before You Sign a Lease
This course focuses on the range of issues that need to be considered before a lease is signed, with implications for both landlord and tenant, and identifies practical measures to reduce the risks. It is essential for anyone involved in negotiating and documenting letting terms to attend.
|14 May 2018||Strand Palace Hotel, London|
Note: All prices are subject to VAT at the prevailing rate
“Fail to prepare; prepare to fail" is a saying which has as much relevance in the field of commercial leasing as it does in other walks of life.
When problems arise mid-term, or upon lease expiry, it is often possible to identify the root cause - what was done, (or not done) prior to the lease being signed.
The reasons are many and varied: fee pressures upon the professional advisers may mean that less time is available for consultation and investigation, or perhaps that work is delegated below the appropriate level of experience and knowledge. The tenant may have an urgent operational necessity to be in the premises as soon as possible or the landlord may be under pressure to finalise a letting.
The result can often be seen in dealing with dilapidation claims at lease-end, when the tenant may say "we knew there was a problem but didn't appreciate how bad it was", or perhaps deficiencies in the lease terms are exposed. However, problems can arise much sooner than that. Typical issues that often arise shortly after taking occupation may include:
- Asbestos found when undertaking fit-out
- No supply of required services to specific parts of a property
- Equipment such as air-conditioning not functioning properly
An essential course for all involved in negotiating and documenting letting terms.
- Understand importance and scope of technical due diligence
- Be able to identify potential problems in relation to neighbouring occupiers and adverse third-party rights
- Recognise pros and cons of means of limiting repair liability, including schedules of condition
- Identify how tenant’s fit-out and alterations impact upon lease-end obligations, and what may be appropriate lease and licence terms to regulate the position
Session 1 - Due diligence
- Caveat emptor
- Pre-lease enquiries
- Common mistakes made by occupiers at the beginning
- TDD: leaving no stone unturned - the process, the advice, the actions, the benefits
- Specialist inspections
- Thinking about lease end
- The EPC: scrutinising the detail
Session 2 - Non-landlord & tenant issues
- Neighbouring occupiers
- Mixed-use developments
- Rights of lights and easements
- Fire escape arrangements
- Planning context - development/infrastructure projects
- The flat above
Session 3 - Heads of terms
- Extent of demise
- Scope of repairing obligations (both landlord’s and tenant’s)
- Schedules of condition: how useful are they?
- More effective ways of limiting tenant’s repairing liability
- Break options and conditions
- Alienation restrictions
- Alterations restrictions
- Permitted use
Session 4 - Impact of fit-out
- Identifying landlord fixtures and tenant’s fixtures
- What should repair obligations extend to?
- What reinstatement obligation is appropriate?
- Fit out impacting on energy efficiency
- Ways in which to reduce reinstatement liability at lease end