A new office, shop or warehouse can support a business's growth, but the lease may create commitments that last long after its needs change. Before agreeing terms for premises in England and Wales, consider the full cost of occupation and how the business could leave or expand.
Look beyond the headline rent
Build a budget that includes service charges, insurance contributions, business rates, utilities and any applicable VAT. Ask how service charges are calculated and what expenditure they can include. Review rent-review provisions, deposits and any personal or company guarantee before treating a quoted rent as the total commitment.
Understand repairs and the condition of the premises
The wording of the lease determines how repair and maintenance responsibilities are allocated. A survey can identify existing defects; a properly agreed schedule of condition may help define the standard the tenant must maintain. Check reinstatement obligations for alterations and potential dilapidations liabilities at the end of the term.
Plan the exit before signing
A break clause can provide an earlier exit, but notice requirements and conditions matter. Record the deadline, the permitted method of service and every condition. Assignment and subletting are different arrangements and depend on the lease and any required consent. Subletting does not normally release the tenant from its own obligations to the landlord.
Confirm use, alterations and renewal rights
Check that the lease permits the intended business activity and proposed fit-out. Landlord approval and planning permission are separate issues; one does not automatically provide the other.
Many business tenancies benefit from renewal rights under Part II of the Landlord and Tenant Act 1954, subject to the statutory rules. The parties can exclude those rights by following the contracting-out procedure. Understand the consequences before committing, especially where the location is central to the business. The Law Commission's ongoing review does not itself change the current law.
Balaghi & Rose advises businesses, commercial landlords and investors on commercial property arrangements. Contact info@balaghi-rose.com before signing heads of terms or a lease so that legal issues can be considered alongside the commercial negotiation.
Published 23 October 2026. General information only; advice depends on the facts and the law applicable to your matter.
