Draft Lease

The Landlord's solicitors will draft the Lease reflecting the terms that the two parties have already agreed.

Searches

We always recommend Tenants carry out property searches before completing a Lease. These will include:-

1. A Local Authority Search which gives basic information about planning permissions affecting the Premises, building regulation consents, whether the road adjoining the property is an adopted highway and whether any department within the Local Authority have served any notices in respect of the Premises.
   
2. A Water Authority Search which confirms whether the premises are connected to mains water supply and mains drainage. It also indicates the position of the mains water services nearto the premises.
   
3. A Environmental Search which provides information as to the site history of the premises and whether the premises are in an area which has potentially been contaminated. It also indicates whether the premises are at risk of other environmental problems such as subsidence or flooding.

Survey

We would suggest that Tenants arrange for a survey of the premises to be carried out to establish exactly what condition they are in at the time that they enter into the Lease. This needs to be considered in connection with the repairing obligation under the terms of the Lease. If you are a Tenant taking on a full repairing Lease, you will want a good idea of any defects within the premises before you sign the lease.

Enquiries

The Tenant’s solicitors will raise enquiries with the Landlords solicitors regarding the premises to try and get as much information about the premises as possible. These need to be replied to in full because they form the representations on which the Tenant replies upon in entering into the lease.

Approving the Lease

The Tenant’s solicitors will check through the Lease to confirm that it reflects what the parties have agreed. As a Tenant, it is usually very helpful to have a meeting with your solicitors as you will have usually visited the premises and so will have a degree of personal knowledge about them. You will also have your own ideas as to what you want to do with the premises and your intended use of them. This needs to be considered when looking at the terms of the Lease. The Tenant's solicitors will then suggest amendments to the draft documents to the Landlordss solicitors.

There then follows a degree of negotiation between each party’s solicitors to try and agree the best Lease for the parties. Obviously the Landlord’s will want different provisions to their Tenant’s and so it is a matter of finding the acceptable compromise for both parties.

Engrossments

Once all the documents have been agreed, a final set of the Lease and other documents is produced and these are known as the “engrossments”. One set of the documents will be signed by the Landlord and one set will be signed by the Tenant.

Completion

Once all parties have signed the engrossments, these are then “completed” by the solicitors dating and exchanging the documents. At this stage the Tenant is usually required to pay rent in advance up to the next rental payment date. The Landlord will then let the Tenant in the premises.

Stamp Duty Land Tax and Registration

Upon completion of any Lease a Tenant’s solicitors has to file with the HM Revenue a Stamp Duty Land Tax Return within 30 days. In certain circumstances, Stamp Duty Land Tax will be payable. Many Leases nowadays also have to be registered at H M Land Registry and when acting for a Tenant, we will deal with the registration requirements.

Break Clause Dates and Rent Review Dates

You should make a note of the date if any on which the tenant has an option to determine the Lease under a break clause together with a reminder well in advance on the date on which you have to serve any notice. You should also make a note of the date on which there is a rent review under the terms of the Lease, and also of course the date on which the lease terminates if the lease is not excluded from the provisions of the Landlord & Tenant Act 1954 you should make a note of the date 6 months before the termination date in case notice needs to be served.

• Leases: What does it all mean ?