Property Practice Flashcards
Typical structure of a lease (8)
- Identity of Parties (Landlord & Tenant)
- Address + extent of premises
- Length of term & any renewal / break rights
- Rent & rent review
- Insurance
- Assignment rights
- Repair, permitted use & alterations obligations
- Provisos- Landlord’s power to forfeit lease for breaches of covenant
Commencement Clause
THIS LEASE is made on 1st May 2025
BETWEEN:
1. Midborough Estates Ltd (Company No. 01234567) whose registered office is at 50 Queen Street, London EC1A 1AA (“the Landlord”), and
- Greenfield Interiors Ltd (Company No. 98765432) whose registered office is at 3 Brook Road, London SE1 2UP (“the Tenant”).
Grant of the lease clause
“The Landlord leases to the Tenant all that property known as Unit 3, Riverside Business Park, London SE10 8JP (the ‘Premises’), together with the rights set out in Schedule 1 but excepting and reserving the rights in Schedule 2, to hold the same to the Tenant for a term of 10 years from and including 1st May 2025 to and including 30th April 2035, at the yearly rent of £30,000, payable as provided in this Lease.”
Ancillary Rights clause
- Ancillary Rights- CHAT GPTA
4.1. The Tenant has the right to use in common with others:
(a) the entrance hall, stairways, and service installations;
(b) any communal refuse storage and loading bays;
(c) access over the estate road for pedestrian and vehicular access.
Ancillary Rights clause
- Ancillary Rights-
4.1. The Tenant has the right to use in common with others:
(a) the entrance hall, stairways, and service installations;
(b) any communal refuse storage and loading bays;
(c) access over the estate road for pedestrian and vehicular access.
Rent Clause
- The annual rent
7.11 The tenant shall pay the annual rent and any VAT in respect of it by four equal instalments in advance on or before the rent payment dates. The payments shall be made by banker’s standing order or by any other method that the landlord requires at any time by giving notice to the tenant.
7.12 The first instalment of the annual rent and any VAT in respect of it shall be made on the date of this lease and shall be the proportion, calculated on a daily basis, in respect of the period beginning on the date of this lease and ending on the day before the next rent payment date.
Tenant repair covenants
10 Repairs
10.1 The Tenant shall repair the Property [defined as the whole building].
10.2 The Tenant shall not be liable to repair the Property to the extent that any disrepair has been caused by an Insured Risk, unless and to the extent that:
(a) the policy of insurance of the Property has been vitiated or any insurance proceeds withheld in consequence of any act or omission of the tenant or any person on the property with the tenant’s authority; or
(b) the insurance cover in relation to that disrepair is excluded, limited or is unavailable as mentioned in [the landlord’s covenant to insure – see 6.8.1 below].
Where the landlord is insuring the building, the tenant should ensure that they are not responsible for repairing damage arising as a result of insured risks as this type of damage should be covered by the insurance provisions in the lease.
Insurance- covenant by the tenant to pay for the insurance polices
20.3 The tenant shall pay to the landlord on demand:
a) the insurance rent;
b) any amount that is deducted or disallowed by the insurers pursuant to any excess provision in the insurance policy; and
c) any costs that the landlord incurs in obtaining a valuation of the property for insurance purposes.
Alterations/structural changes
7 Alterations
7.1 The tenant shall not make any external or structural alteration or addition to the property and shall not make any opening in any boundary structure of the property.
7.2 The tenant shall not install any service media on the exterior of the property nor alter the route of any service media at the property without the consent of the landlord, such consent not to be unreasonably withheld.
7.3 The tenant shall not make any internal, non- structural alteration to the property
unless:
(a) all necessary consents from any competent authority have been obtained
(b) the landlord has been supplied with drawings and where appropriate a specification in duplicate prepared by an architect who must supervise the work throughout
(c) the reasonable fees of the landlord, any superior landlord, any mortgagee and their respective professional advisors have been paid
(d) the tenant has entered into such covenants as the landlord may require as to the execution and reinstatement of the alterations
(e) the landlord’s prior written consent has been obtained (such consent not to be unreasonably withheld).
User and planning clauses
Absolute Covenant
The tenant must not to use the Premises other than as a restaurant.
Narrow user cause with a possibility of changing the user
The tenant must not use the Premises other than as a restaurant or such other use falling within Use Class E of the Town and Country Planning (Use Classes) Order 1987.
Qualified covenant
Not to use the Premises other than as a restaurant or such other use falling within Use Class E of the Town and Country Planning (Use Classes) Order 1987 as the Landlord may approve in writing.
Fully qualified covenant
Not to use the Premises other than as a restaurant or such other use falling within Use Class E of the Town and Country Planning (Use Classes) Order 1987 as the Landlord may approve in writing (such approval not to be unreasonably withheld).
Alienation clauses: assignment
Absolute covenant against alienation
Except as expressly permitted by this lease, the Tenant shall not assign, underlet, charge, part with or share possession or share occupation of this lease or the Property or hold the lease on trust for any person.
Assignments
6.11 Except as expressly permitted by this lease, the tenant shall not assign, underlet, charge, part with or share possession or share occupation of this lease or the Property or hold the lease on trust for any person.
6.12 The tenant shall not assign the whole of this lease without the consent of the landlord, such consent not to be unreasonably withheld.
6.13 The tenant shall not assign part only of this lease.
6.14 The landlord and the tenant agree that for the purposes of section 19(1A) of the Landlord and Tenant Act 1927 the landlord may give its consent to an assignment subject to all or any of the following conditions:
(a) a condition that the assignor enters into an authorised guarantee agreement in the form set out in Schedule 1; and
(b) a condition that a person of standing acceptable to the landlord acting reasonably enters into a guarantee and indemnity of the tenant covenants of this lease in such form as the landlord may reasonably require.
6.15 The landlord and the tenant agree that for the purposes of s 19(1A) of the Landlord and Tenant Act 1927 the landlord may refuse its consent to an assignment if any of the following circumstances exist at the date of the tenant’s application for consent to assign this lease:
(a) the Annual Rent or any other money due under this lease is outstanding or there is a material breach of covenant by the tenant that has not been remedied; or
(b) in the landlord’s reasonable opinion the assignee is not of sufficient
financial standing to enable it to comply with the tenant’s covenants and conditions contained in this lease.
Insurance- A covenant by the landlord to insure the property against defined r
Insurance
20.1 Subject to clause 20.2 the landlord shall keep the property insured against loss or damage by the insured risks for its full reinstatement value.
20.2 The landlord’s obligation to insure is subject to:
a) any exclusions, limitations, excesses and conditions that may be imposed by the insurers; and
b) insurance being available in the London insurance market on reasonable terms acceptable to the landlord.
Reinstate- A covenant by the landlord to reinstate the property
20.4 The Landlord shall, subject to obtaining all necessary planning and other consents, use all insurance money received (other than for loss of rent) to reinstate the Property.
The Landlord shall not be obliged to:
a) provide accommodation identical in layout or design so long as accommodation reasonably equivalent to that previously at the Property is provided; or
b) repair or rebuild the Property after a notice has been served pursuant to [the break clause].
Rent suspension clause
20.5 If the property is damaged or destroyed by a risk against which the landlord is obliged to insure [see clause 20.1 and 20.2 above] so as to be unfit for occupation and use then, unless the policy of insurance of the property has been vitiated in whole or in part in consequence of any act or omission of the tenant or any other person on the property with the actual or implied authority of the tenant, payment of the annual rent, or a fair proportion of it according to the nature and extent of the damage, shall be suspended
until the property has been reinstated and made fit for occupation and use, or until the end of three years from the date of damage or destruction, if sooner.
Termination of lease if reinstatement is impossible
20.6 If, following damage to or destruction of the property, the landlord reasonably considers that it is impossible or impractical to reinstate the property, the landlord may terminate this lease by giving notice to the tenant. On giving notice this lease shall determine but this shall be without prejudice to any right or remedy of the landlord in respect of any
breach of the tenant covenants of this lease. Any proceeds of the insurance shall belong to the landlord.
20.7 Provided that the tenant has complied with its obligations in this clause 20, the tenant may terminate this lease by giving notice to the landlord if, following damage or destruction by a risk against which the landlord is obliged to insure, the property has not been reinstated so as to be fit for occupation and use within three years after the date of damage or destruction. On giving this notice this lease shall determine but this shall be without prejudice to any right or remedy of the landlord in respect of any breach of the tenant covenants of this lease. Any proceeds of the insurance shall belong to the landlord.
Self-help Clause- Landlord’s right to enter on breach of repair covenant
Allow entry
1.1 The Tenant must allow the Landlord to enter and inspect the Premises.
1.2 If the Landlord requires the Tenant to remedy any breach of the Tenant’s obligations regarding the state and condition of the Premises or to remove any unauthorised alterations then the Tenant must comply with those requirements immediately in the case of an emergency or, in all other cases, begin to comply with those requirements within one month after being notified of them and diligently complete any works required.
1.3 If the Tenant does not comply with clause 4.9.2, the Landlord may enter the Premises and carry out any works required itself. The Tenant must repay, as a debt on demand, all the costs the Landlord incurs in so doing. The Landlord’s rights under clause 6.1 will be unaffected.
Re-entry and forfeiture
Forfeiture
9.1 Whenever:
a) any rent reserved by this lease is outstanding for twenty one days
after becoming payable (whether formally demanded or not); or
b) the tenant is in breach of any of the tenant’s covenants in this lease;
then in any of those cases the landlord may at any time (notwithstanding the
waiver of any previous right of re- entry) re- enter the building or any part in the name of the whole whereupon the term will end …
Rent Review Clause
Rent review
1.1 On the Rent Review Date, the Main Rent is to be reviewed to the higher of:
1.1.1 the Main Rent reserved immediately before the Rent Review Date; and
1.1.2 the Market Rent.
1.2 The reviewed Main Rent will be payable from and including the Rent Review Date.
