Can I sublet my commercial premises?
It may be that you wish to sublet on a temporary basis, or permanently if you are moving to a different premises. Depending on the terms of your lease, you may be specifically excluded from subletting part or all of the premises. If there is no mention or provision of underletting or subletting within your lease, you will usually be free to sublet (although you should take legal advice before doing so). However, most leases will contain a clause dealing with underletting and other forms of what is known as alienation (e.g. sharing occupation or parting with possession).
Often, your lease will state that you must seek the landlord’s permission to sublet. Usually, permission must not be unreasonably withheld. Should your landlord consent to subletting, they will most likely make this subject to certain conditions which may already be set out in your lease.
What is a break clause?
Break clauses are written into commercial leases to protect the landlord and/or tenant in certain events, allowing them to terminate early without penalty. A commercial lease will define the precise conditions to be satisfied in order to exercise the break clause in a valid manner. Examples of conditions for exercising a break clause include all rent being paid to date, all repairs being carried out by the tenant as required under the lease and vacant possession being provided.
Break clauses can be difficult to use in practice and may lead to disputes. The procedure must be followed to the letter and legal advice should be obtained.
Can I end a commercial lease early?
For a tenant, if there is no break clause the only ways to legally exit a commercial lease before the expiry fo the term is with the express permission of the landlord (usually recorded in a deed of surrender) or by assigning the lease to another person.
Landlords are able to end a lease early if the tenant fails to make their rent payments or if there is another breach of the tenant’s obligations in the lease. There are a number of rules which affect how and when a landlord can end a commercial lease which must be followed or the tenant may be entitled to bring a claim against the landlord.
What are my rights if my landlord is not carrying out his/her legal obligations?
Like tenants, landlords will have obligations under the terms of the commercial lease. Generally, they are required to ensure fixtures and fittings are safe to use, the building has adequate fire safety equipment, gas and electrical items are checked regularly, asbestos-risks are managed, and maintenance and repairs are carried out according to the terms of the lease.
If the landlord is in breach of their obligations, tenants have a range of possible options including:
- Requesting specific performance from the Court – which obliges the landlord to fulfil their obligations
- Completing the work themselves and then claim the costs from the landlord
- Seeking damages for any losses
- Reduce the payment of rent to cover damages
- In situations where breaches are serious, it may even be possible to terminate the lease
The best option will depend on the terms of the lease and the circumstances, as such, it is recommended you seek legal advice before making a decision.
Is it necessary to instruct a solicitor when drafting or signing a commercial lease?
By agreeing to the terms imposed by a commercial lease without seeking legal advice, you may inadvertently place yourself and your business at risk. It is the role of a property lawyer to ensure that your best interests are protected and represented and that the lease you sign reflects what both landlord and tenant have agreed with no nasty surprises.
If you would like to discuss any of the above questions further, or you have another commercial property enquiry, speak with Daniel Gardner, one of our property specialists, on 01202 292 424 or email email@example.com.