Commercial lease Solicitors
Clear legal guidance for both landlords and tenants
Our experienced commercial lease solicitors offer clear legal guidance for both landlords and tenants.
Frequently asked questions about commercial leases
What is the most common type of commercial lease?
The most common type of commercial lease is a double net lease. This means that the landlord pays for any maintenance on the property, and the tenant is responsible for paying tax and insurance on the property. This is common in situations where the landlord owns the whole building and the tenant is renting an individual unit.
Do you pay tax on commercial property rent?
Depending on the specific circumstances, commercial property rental income can be subject to multiple taxes including:
- Income tax
- Stamp Duty Land Tax (SDLT)
- Corporation tax
- VAT
This is a complex matter and it is advisable to enlist the support of a qualified commercial property solicitor to ensure you pay the correct taxes and amounts.
Do you pay stamp duty when you rent a commercial property?
Yes the tenant is responsible for paying SDLT on the commercial property that they rent. It is a very complex system so it is advisable to enlist the help of a qualified commercial property solicitor to guide you through what you owe. It is common for people to mistakenly overpay on this tax and the reclaiment process is very time-consuming so best avoided.
Who pays for a commercial lease assignment?
Commercial lease assignment means transferring the lease from one party to another, and the new tenant takes on all of the responsibilities that the previous tenant held. Costs involved in assigning a commercial lease include:
- Legal fees: usually shared by the incoming and outgoing tenants, not the landlord.
- Landlord’s costs: either paid by the new tenant or shared between the incoming and outgoing tenant.
- Fulfilling lease obligations: the outgoing tenant may need to bring rent payments up to date or carry out essential repair works before the lease is assigned.
- Renewing EPC certificate: if it has expired, this is the outgoing tenant’s responsibility to sort.
Can a landlord refuse to assign a commercial lease?
A landlord can only refuse to assign a commercial lease if they have valid reasons for doing so. Some reasonable grounds for refusal may be concerns about the prospective tenant’s ability to pay the rent, or their ability to keep up with repairs and maintenance. These reasons must stand up in court.
Can a commercial lease be terminated early?
In certain circumstances, a commercial lease can end early. Some of these include:
- Break clause: If there is a break clause in the lease originally, this may provide a way to terminate the lease early without consequences.
- Assignment: A tennant may be able to find someone else to take over the lease, but the landlord has to agree.
- Surrender the lease: The tenant may be able to negotiate with the landlord to give up possession of the property. The tenant may need to pay the landlord to do this.
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