Commercial landlords and tenants have to deal with a lot of complex property legislation. This legislation can be landlord biased and impose onerous obligations on Tenants. When issues involving Commercial Landlords and Tenants arise it’s always best to consult a specialist. Here at United Solicitors, we have an expert commercial lease solicitor ready to help you.
Leases
A lease is a contract for a certain period of time that gives the tenant a right to use the leased property. It stipulates the terms and conditions of the tenancy including a rent amount, permitted uses, landlord’s rights of entry, service charge obligations and more. It is important that a commercial landlord or tenant understands the intricacies of leases as they are a legally binding agreement. There are many issues that need to be considered and negotiated such as liability for repairs, alterations, permitted usage and rent reviews. If these areas are not addressed satisfactorily it can lead to significant difficulties for a landlord or tenant during the term of the lease.
A commercial lease can include special clauses for assignment and lease purchase. These may outline the purchasing process and terms once the lease period has elapsed. They may also contain an option fee amount, which legally binds the parties to a sale if they do not agree otherwise at the end of the lease period. They can also contain language regarding a requirement that a purchaser is of financial standing to assume the lease.
Often the leasing process of a property involves several solicitors, surveyors and other professionals such as architects or engineers. In addition to this there are usually Land Registry registration fees and SDLT (Stamp Duty Land Tax) which is payable on the premium and rental value of the lease. On a small commercial transaction, legal fees for a landlord or tenant will be in the region of PS1,500-PS2,000 (excluding VAT).
As a consequence, a prospective landlord or tenant should seek to obtain comprehensive advice early on in the process. This will ensure that the best deal is secured and all responsibilities are understood. In addition, it will help avoid any expensive errors or misunderstandings that might arise during the negotiations. This can be achieved by engaging a specialist commercial lease solicitor who has a broad experience in this area of law. This can be a great way to save money, particularly where an expert is engaged on a fixed-price basis.
Evictions
Evictions are complicated, expensive and time-consuming for both landlords and tenants. They can even be dangerous, especially if the landlord and tenant are at odds. A Commercial Landlord & Tenant Solicitors with a track record of success in such cases can provide valuable assistance to both parties. Landlords can also benefit from having a solicitor by their side when dealing with discrimination claims, lawsuits, audits from the IRS or fights over property damage.
The most common reason for an eviction is non-payment of rent. However, landlords can evict tenants for a number of other reasons, including lease violations and the failure to move out after a specific termination date. Landlords may also file summary eviction proceedings if the tenant’s behavior is a nuisance that interferes with the health, safety or comfort of other residents in the building.
Most states require landlords to have a “just cause” for evicting a tenant. This is generally defined as conduct that is a persistent or egregious violation of the lease terms. Landlords may not evict a tenant for a discriminatory reason, such as race, sex or religion. However, local laws may offer additional protections to tenants.
Once a landlord files an eviction case, the court must notify the tenant of the hearing in writing and give them a chance to reply or respond within 10 days. The court will then schedule a hearing for 3-8 days after receiving the tenant’s response. The original notice must be personally served on the tenant by a process server or handed to them in person if they live there. It must also be posted on the front door of the apartment and sent by regular or certified mail.
The eviction process can be lengthy, and it is crucial to understand the rules of your local housing law before filing an eviction case. Many landlords have a lawyer on retainer for this type of work, and they should be able to help you navigate the complex legal process. A qualified attorney can also assist you if you need to file a writ of possession or get a warrant signed by a city marshal to evict the tenant.
Lease renewals
A lease renewal can provide a number of benefits for both landlords and tenants. It can help a landlord maintain a stable income, avoid vacancies and attract new tenants. It can also help a tenant avoid the costs of finding a new space. However, a lease renewal can also create some challenges for both parties. For example, a landlord may want to increase the rent or make other changes to the terms of the agreement.
A lease is a legally binding contract between the landlord and the tenant that sets forth the specific terms and conditions of occupancy. It should contain the identifying information for the landlord, property management company, and any co-owners of the property, as well as the name and address of the tenant. It should also include a description of the property and any known defects. The lease should also describe the length of the term and whether it is a fixed-term or month-to-month lease.
The tenant should carefully review the contract before signing it. This includes reviewing the renewal clause and negotiating with the landlord about any proposed changes to the lease. The tenant should also note any preconditions,’make good’ requirements, security deposit information, cost payment obligations and release of legal responsibilities.
If the landlord is unwilling to agree to these changes, the tenant can request a Section 25 Notice to terminate the lease before it expires. If the landlord doesn’t respond to the Section 25 notice within 30 days, the tenant can apply to court for compensation.
While some leases allow for a fixed renewal rate, many landlords increase their rental prices at the end of a term to keep up with market rates. These increases can be difficult to negotiate, especially if you have been in the same space for a long time.
It is important to know that a lease renewal can have additional costs, such as insurance premiums and maintenance fees. These costs can be negotiated with the landlord, but they should be reasonable and based on current market rates. Additionally, you should be aware that the landlord can charge you for structural repairs. This includes components like bearing walls, columns, roof and the facade.
Property searches
Property searches are part of the due diligence process that is carried out when buying, leasing or taking a charge over a piece of land. They help to ensure that the legal title is clear and are often a condition of lending to the buyer or tenant. It is crucial that they are raised and agreed at the outset and not left to the last minute as the results of a search can cause delay and even derail the transaction completely.
The most common searches include a local authority search, water & drainage search and environmental & flood search. Your solicitor should advise you on and carry out additional searches that are relevant for the area in which you are buying. These can include the coal mining search which highlights the potential risk of subsidence in properties built on areas that have previously been used for coal mining activities. It also includes the search to establish whether your prospective property is within the boundaries of a commons or village green or might be affected by a planning application made in the past for an extension or works to the existing structure. There is also a search to establish whether you might be responsible for contributing towards the repair of the local parish church (a chancel repair liability).
Turnaround times on the various searches can vary considerably depending on your location and demand so it’s worth staying on top of things and ensuring that all the necessary enquiries are made promptly. If you are concerned about how long it may take to receive the searches then it might be worthwhile considering taking out indemnity insurance against any delays.
Once the searches have been returned and a draft lease has been prepared by your solicitor then the final steps in the process include liaising with the landlord’s solicitor on the basis of the draft papers, agreeing the heads of terms (which should be done as quickly as possible to minimise any delay) and negotiating the terms of the draft lease. Ideally this will be undertaken by way of a face-to-face or zoom meeting and I can undertake this for you for an additional fee.
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