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Thomas
Thomas, Solicitor
Category: Property Law
Satisfied Customers: 7473
Experience:  UK solicitor holding an England and Wales practising Certificate.
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I am about write(online )a 5 year commercial lease agreement.

Customer Question

I am about write(online )a 5 year commercial lease agreement. However along/instead of the breakout clause i want to insert a clause
saying a notice of 5 months can be give an at any point of the lease tenure to end the lease. Is this legal? can it be included?

Also: Can a rent increase clause be included in a fixed term lease or this is only allowed in periodic lease agreements?
Submitted: 2 years ago.
Category: Property Law
Expert:  Thomas replied 2 years ago.
Hi

Thank you for your question and patience, I’m Tom and I’ll try to help you.

You have to be very careful drafting your own lease. There are reasons that people instruct solicitors to do this for them, mostly so they can have someone to sue if it goes wrong.

However, if this is a commercial lease to a commercial business tenant then there is nothing preventing you from inserting a break clause which permits you as landlord to terminate the lease at any point during the term subject to a stated period of notice. As Tenant, I wouldn’t accept it personally simply because it’s not a good deal for them, but there is nothing illegal or unlawful about inserting a break clause of this type.

The position is the same with the increased rent clause. There is nothing illegal about negotiating rent payments which change and increase by fixed amounts over time. So, provided the tenant accepts it then you can do it.

This is by no means an exhaustive guide, but this article lists some of the most conspicuous examples of errors in leases:-
http://blog.beetonedwards.co.uk/2009/07/10-howlers-to-look-out-for-in-lease.html

My goal is to provide you with a good service. If you feel you have received anything less, please reply back as I am happy to address follow-up issues specifically relating to your question.

Kindly rate my answer if you are satisfied with the information I have provided.

Kind regards,


Tom
Customer: replied 2 years ago.

Thanks Tom. The lease is to a commercial Business tenant but is with the individual who will owning the business. Does this make any difference?

Expert:  Thomas replied 2 years ago.
Nope, still a commercial transaction. Doesn't make a difference, as long as it's not a resdiential occupier..

Please remember to rate my answer.

Tom
Customer: replied 2 years ago.

Sorry. Just a last question. So it does not really matter what lease I do-a fixed term or a periodic. I can increase the rent and can also insert a termination clause

Expert:  Thomas replied 2 years ago.
Hi,

A periodic tenancy is one without a fixed term which continues from one rent period to the next.

If you want to have a break clause with a tenant obligated to pay rent for a set term then you need to have a fixed term lease.

Tom
Expert:  Thomas replied 2 years ago.

Is there any further information you require?

I just want to ensure that you are satisfied, so please let me know if you have any further queries on the information I have provided.

If not, please rate my answer.

Kind regards,


Tom

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