Commercial leases

Legal characteristics of a lease

Types of lease: What types of arrangement does the law recognise which allow occupation and use of real property for a limited period of time?
Length of leases: What is the usual length of each type of commercial lease?
Are there any specific regulations and/or laws which apply to leases of particular categories of real estate, such as residential, industrial, offices, retail or hotels and what is their impact?

Lessees' rights to possession

Security of tenure: Does a lessee have a right to continue to occupy the relevant real estate after the expiry of a commercial lease?
Recovering real estate from a lessee: What does a lessor need to do to ensure that a lessee leaves on the date originally agreed?
Early termination: Can a lessee be forced to leave prior to the date originally agreed and, if so, how long will this process take?
Termination by a third party: Can a lease be terminated by any third party, eg the government or a municipal authority? If so, how long does this process take? Is compensation payable and, if so, who pays it?
Financial security: What additional form(s) of security can be provided to a lessor to protect against a failure by the lessee to meet its obligations?

Managing leased real estate

Use by the lessee: Can restrictions be imposed by the lessor on how a lessee uses the real estate and are there any regulations and/or laws which impose further restrictions?
Alterations: Is the lessee permitted to alter or improve the real estate and, if so, what conditions can be imposed on such works?
Transferring the lease: In what ways, if at all, can a lessee transfer its rights to a third party and what restrictions can be imposed on such transfers?

Rent

Fixed or variable rents: Will the rent payable remain the same as long as the lease lasts?
Changes in rent: If the rent is to be changed or increased how will the new rent be determined?
VAT on rent: Is VAT charged on rent?

Costs other than rent

Initial costs: What costs if any, other than rent, are payable by a lessee at the start of a lease?
Communal costs: Who pays for the maintenance and repair of areas used by several lessees, for example car parks and gardens?
Repairing the leased space: Who pays for the maintenance and repair of the real estate actually occupied by the lessee?
Costs of utilities: How are utilities and telecommunications which serve a property occupied by several lessees paid for?
Insurance: Who pays the cost of insuring the real estate which is the subject of a lease and what events causing damage will usually be covered by the policy?

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