LANDLORD AND TENANT

Most businesses occupy their premises under lease – as Tenant. The owner – Landlord - is quite often a remote property investment company, seeking to maximise its income and minimise expenditure liability thus increasing the value of its investment.

Consequently conflicts can develop between the Landlord and the Tenant usually involving rent payment & reviews; service charges; repairing obligations; sub-lets; lease surrender; and dilapidations, etc.

Recently, government recognition of anomalies in property law and its application has sought to introduce a code of practice. The 2002 Code was updated in 2007 increasing the areas of ‘best practice’ which have now been widely endorsed by groups representing both landlord and tenant interests.

Sounds encouraging. But a modern institutional Lease document is often around 80 pages in length; it’s prepared by seasoned lawyers acting for Landlord’s and contains a raft of obligations on the Tenant which if overlooked can seriously prejudice the Tenant’s rights and prove very costly if not understood and complied with.

On the plus side for tenants the length of a typical lease term has reduced dramatically from the ‘normal’ 25 years of the 1980-90’s. In the present economic climate more business premises are becoming vacant and fewer tenants are out there in the market. Landlords may be faced with greater income voids whilst, at the same time, paying out business rates and other outgoings on empty premises. Clearly, it’s in their interest to retain good tenants wherever possible.

There has probably never been a better time for Tenants to negotiate preferential lease terms, as now. My input – again, usually in consultation with retained lawyer - is based on the recognition of opportunities the market weakness may present to existing tenants, in terms of rent reviews and lease renewals as well as measures to avoid time limit traps and unnecessary expenditure on repairs.