It is very important for both landlords and tenants not to be surprised by the terms of a lease. If a tenant finds that a lease contains an unexpectedly onerous obligation the finances of their business may be adversely affected. Likewise, if a landlord discovers that a financial burden relating to the property is his liability, the value of the landlord’s investment interest may be adversely affected.
Leases are detailed documents and the drafting of them is adjusted regularly in order to reflect changes in case law and statute. These changes may relate, for example, to the law relating to the interpretation of rent review clauses, which if not understood or appreciated, could lead to considerable financial disadvantage for either landlord or tenant at rent review.
The term (length) of a lease is now much more important in calculating the Stamp Duty Land Tax (SDLT) cost to the tenant on that lease. The complex calculation of SDLT liability needs to be part of the earliest negotiations on any new lease.
We are frequently asked to advise on the legal effect of existing lease provisions. This can arise as a prelude to a dispute between parties, possibly relating to dilapidations, transfer of lease or sub-letting, implementation of service charge provisions or a renewal of a business lease. In the event a dispute develops, the firm’s business litigators will assist in dealing with such issues.