The lease is the deal — read it before the fit-out
A commercial lease is a long-term commitment dressed in legal language, and it is negotiated almost entirely before signature. Once signed, the tenant's position is what the document says, not what was discussed at the viewing or in the agent's emails. The time to press on terms is before the heads of terms are agreed, because after that the landlord's solicitor is drafting and the negotiating leverage is gone.
The three questions that frame everything else are: how long, on what basis does the rent change, and how do I get out? Term, rent review and break rights. A five-year term with no break is a five-year liability even if the business model changes in year two, and the rent review clause determines whether year three's rent is a negotiation or a formula.
Landlords price flexibility into the rent: breaks and shorter terms usually cost more. That trade is legitimate — but it should be made deliberately, with both sides of it visible, not discovered in year three when the business needs to move.
Repair, service charge and the end of the term
Repairing obligations are where commercial tenants lose the most money. A full repairing and insuring lease makes the tenant responsible for the whole building's condition, including structural — often regardless of what it was like when they arrived. The protection is a schedule of condition agreed at the start, which caps the tenant's liability at the state of the premises as photographed and recorded on day one.
Service charges are the other common surprise. On a multi-let estate, the tenant pays a share of the landlord's costs of running it, and the share is only as fair as the lease says it is. Caps on service charges, the right to see accounts, and exclusions for capital works are all negotiable at the drafting stage — and effectively impossible to negotiate afterwards.
At the end of the term, dilapidations arrive: the landlord's claim for the premises' condition measured against the lease. A tenant with a schedule of condition, a well-managed maintenance record and an early dilapidations assessment typically settles for a fraction of the figure first claimed. The difference is made years earlier, at drafting.
Rent review, assignment and change
Most modern leases have upward-only rent reviews — the rent can go up, never down, at set intervals, usually to open market value or by indexation. The details matter: when the review date falls, who can trigger it, what happens if the parties disagree (arbitration or independent expert), and whether indexation is capped. Over a ten-year term the review mechanism can move the total rent by more than the rent itself.
Flexibility clauses govern what happens when the business changes. Assignment (transferring the lease to someone else), underletting, sharing occupation, and alterations: each is permitted, permitted with landlord's consent, or prohibited. A lease that prohibits assignment outright turns the leasehold itself into a stranded asset if the business is sold.
Change of control deserves specific attention for group businesses: some leases treat a change in the tenant's shareholders as a breach. A group restructuring or investment round should not require renegotiating the lease, but it can unless the clause was checked first.
Security of tenure and the negotiation that matters
Most commercial leases in England and Wales give the tenant security of tenure under the Landlord and Tenant Act 1954: when the term ends, the tenant can stay and demand a new lease on similar terms unless the landlord proves a ground — such as occupation for redevelopment. The parties can 'contract out' of that protection, which landlords commonly want and tenants should price consciously: contracting out means no right to a new lease at the end, full stop.
The practical negotiation list for a tenant, in order of financial impact: a schedule of condition; a break right with clearly drafted conditions; a service charge cap; a rent review cap on indexation; assignment rights; and the carrying out of any landlord works before completion. None of these is exotic. All of them are standard asks, and a landlord expecting a serious tenant will engage with most of them.
Burns & Co. Legal advises tenants and landlords on commercial leases, acquisitions and disposals at fixed fees agreed in advance. Before you sign, a lease review costs a fraction of one year's rent — and it is the only point at which every term is still on the table.