How to avoid the pitfalls of a commercial lease

By Lea Hough Chartered Surveyors

04 Apr 2019

dsc09455.jpg

Taking on a lease on a commercial property is something that businesses up and down the UK do on virtually a daily basis. Despite it being a relatively common business practice, it is amazing how easy it is for mistakes to be made, sometimes leaving the business in an extremely precarious position and even occasionally resulting in the demise of the business altogether.

Here at Lea Hough, we regularly advise businesses that are taking on commercial leases and as such, have seen the good, the bad and the ugly.

Here are the four pitfalls of commercial leases you should look to avoid at all costs.

1. Taking on a lease without a Schedule of Condition

This is one of the most costly mistakes an incoming tenant can make. A Schedule of Condition is a professionally prepared document that includes both detailed written descriptions and extensive photographs to give a clear record of the condition of a building when a Tenant takes possession.

Without this in place, it can be very difficult to later prove what condition the property was in at the time when occupancy was taken, therefore making it possible for the landlord to serve them with a hefty Schedule of Dilapidations when the lease comes to an end.

Ensuring that you have a good quality Schedule of Condition drawn up can go a long way to protecting your interests. Once written up, this should be attached and referenced to the lease for both parties to sign.

2. Failing to understand your obligations

A commercial lease will typically contain a provision for the tenant to keep the property in good repair and condition throughout the lease term. When becoming a tenant of a commercial property, you will automatically take up the maintenance and repair obligations as detailed in the lease. As such, it is important to both budget and plan for ongoing repair works.

It is also very important to check your position in relation to how it the property is to be left at the end of the lease – ie. whether you will need to put the property back to a similar condition (or at least layout) as original. This is especially important for buildings that are already in a dilapidated state when you take occupancy.

3. Undertaking unauthorised works

Taking on a commercial space will usually involve relocating a business’ operations, or at least an element of its function, to the property. The space therefore has to work for the tenant, which may mean making alterations. Tenants need to be very wary of going ahead and making changes without seeking the express permission of their landlord, which typically involves a Licence To Alter. Should changes not be approved, the tenant could be asked to reinstate the property to its original condition, which is often impractical and very costly.

4. Not paying attention to break clauses

For tenants, a break clause is used to provide flexibility to accommodate a potential change in future circumstances. However, break clauses can also benefit the landlord in some cases.

If you are unsure whether or not you want to stay in the property for the full term of your lease, be sure to take advice well in advance of the break date – ideally at least 12 months in advance and at least 6 months before the break ‘trigger notice date’.

If you do wish to activate a break clause, your obligations regarding the property’s repair will usually be the same as if the lease had run its full course, and you will likely have to begin a programme of works to bring the building back to the state the lease dictates.

These are just some of the pitfalls we regularly come across in relation to taking on commercial leases. The law in this country very much favours landlords, with tenants taking of a lion’s share of responsibility for upkeep and maintenance during the term of a lease.

In order to protect your interests as best as you can, it is always worth consulting with a Chartered Surveyor prior to signing a lease. For more information on Lea Hough’s services for both tenants and landlords, please get in touch.

Latest news

1

Beever and Struthers advise on £1.5bn funding for 2,000 new social homes a year John Jones

Beever and Struthers advise on £1.5bn funding for 2,000 new social homes a year

03 Jul 2025

2

Airframe Designs aligns with US programme for additive manufacturing growth Additive manufacturing technology unit At Airframe Designs

Airframe Designs aligns with US programme for additive manufacturing growth

03 Jul 2025

3

Panache Cruises on course for further growth with support from Rosebud James Cole

Panache Cruises on course for further growth with support from Rosebud

03 Jul 2025

4

Lancashire emerges as key player in UK's Defence and Tech Sector Mo Isap Chair Of The Lancashire Business Board Nick Miles National Cyber Force Deputy Director For Samlesbury Annette Weekes Representative Of The NWRDSC

Lancashire emerges as key player in UK's Defence and Tech Sector

03 Jul 2025

5

Report shows impact of BAE Systems in Lancashire BAE Systems Radar

Report shows impact of BAE Systems in Lancashire

02 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV123 July/August Launch Event
Lancashire Business View magazine launch
Networking
16 Jul 2025

LBV123 July/August Launch Event

Burnley

08:30 - 10:30

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

The Marketing Metrics that Matter – July 4
LBV Hub Seminars
04 Jul 2025 - 04 Jul 2025

The Marketing Metrics that Matter – July 4

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

08:30 - 11:00

Tri-Site Survey Equipment Showcase
unnamed (2).jpg.jpg
LBV Hub Seminars
09 Jul 2025 - 09 Jul 2025

Tri-Site Survey Equipment Showcase

Crow Wood Hotel, Burnley, BB12 0RT

09:30 - 16:00

Choose Chorley for Business - Talent Reimagined Business Breakfast
talentreimaginedbb.png.png
LBV Hub Seminars
10 Jul 2025 - 10 Jul 2025

Choose Chorley for Business - Talent Reimagined Business Breakfast

Strawberry Fields Digital Hub, Chorley, PR71PS

08:00 - 10:30

Blackburn Cathedral hosts Champagne and Diamonds Event with Ainsworth Jewellers
Champagne-Jewellery 10 07 25_page-0001.jpg.jpg
LBV Hub Awards
10 Jul 2025 - 10 Jul 2025

Blackburn Cathedral hosts Champagne and Diamonds Event with Ainsworth Jewellers

Blackburn Cathedral, Blackburn, BB1 5AA

18:00 - 20:30

Shaping Preston's future by remembering its past
1750160034867.png.png
LBV Hub Networking
16 Jul 2025 - 16 Jul 2025

Shaping Preston's future by remembering its past

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:30

Chamber Summer BBQ
LBV Hub Social
17 Jul 2025 - 17 Jul 2025

Chamber Summer BBQ

The Borough, Dalton Square, Lancaster, LA1 1PP

17:30 - 20:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin