5 Important Things You Needs To Know About Commercial Leases Before Starting Your Business

Purchasing a property for your business requires several points to consider. You have the think about the size, location, the safety of the building and whether there are any repair costs. These are mainly aesthetic elements that you’d consider, but what about the legal aspects of purchasing a commercial property? There are minor cases where some business owners have the benefit of a large enough investment to buy a property outright, but in the majority of cases, it’ll be a rented premise that’s acquired from a landlord. Within the lease, there’ll be clauses which can benefit the tenant and some which benefit the landlord. When taking on a lease, these are the important clauses that you should look out for:

The Term Of The Lease

This is essential to any lease. If there’s no term, then there’s no lease. A commercial lease tends to average about 5-10 years but there can be flexible with your term depending on the nature of your business. A restaurant, for example, may need more than 5-10 years to grow, in which case you may wish to spread the costs out for longer. It’s all about finding a term that’s suitable for you. One thing to remember is by committing to a longer period, the landlord will feel more secure that the property is occupied, which can potentially lead to a better bargain.

A Rent Review

A rent review is a clause that a landlord can insert into the agreement that allows them to change the terms of the rent during the tenancy of the property. A landlord may insert this if they due to inflation and market rates. What you need to consider with this is the frequency of the rent review and the amount of increase that’s agreed. They can be extremely complex and should be provided with special care. If required, hire chartered surveyors Manchester that can double check the terms of the review.

Break Clauses

Whilst the tenant is under contract, they remain responsible for the property and continue to be until the end of the contract. They can’t simply walk away. A break clause can make this possible, however. It allows either the tenant or the landlord to end the lease before it’s actual end date but this is something that landlords tend to avoid as they need the income. If one is to be inserted, they aim for the clause only to be active after a minimum period when particular conditions are met. On the other hand, a landlord’s break clause can be activated at any time.


Although it may have an odd name, alienation refers to the tenant having the right to dispose of the property, either by leasing it or transferring it to another party. In some cases, the tenant doesn’t have the option to dispose of the property at all, and it would require permission from the landlord. The more strict this is, the less value the lease has as it can’t be transferred to anyone else. Just look out for the Authorised Guarantee Agreements in this section as this can make the tenant still accountable for the rent even after they’ve transferred it.

During the purchase process, it’s likely that you’ll hire a property management Manchester based company to guide you through it. In which case, some legalities can be run through them by you to make sure that the purchase is right for you.