Calling all Landlords and Tenants, managing your commercial lease does not have to be a commercial nightmare.


With 2008 well and truly underway it is time to think about getting your house in order in relation to your commercial leases.  Are you fully familiar and compliant with your obligations as either Landlord or Tenant in respect of your commercial property?  The Property team in Hayes solicitors is here to give you a helping hand to assist in identifying those areas which need your attention.

We have set out below a practical check list of issues you need to consider as Landlord and as Tenant.  This list is not exhaustive and should be used merely as a guide. For more detailed advice on the matter you should contact a member of Hayes solicitors Property and Private Client Department.  See below for full contact details of our team.

LANDLORDS:

  1. Do you know whether you have a commercial lease due to expire this year?  If so, six months prior to expiry you should arrange an inspection of the premises, ensure all arrears of rates, service charge etc are paid up to date.

 

  1. Have you renewed your Buildings Insurance for the year? Does the property need an up to date valuation to ensure your insurance cover is adequate to meet the reinstatement cost of the premises?
  1. Have you requested a copy of your Tenant’s up to date insurance policy and evidence that the Tenant’s policy has been renewed for the forthcoming year?

 

  1. Is it time to carry out an inspection of the premises to assess the state of repair and condition of the premises and call on the Tenant to carry out any necessary repairs for which they are responsible under the lease?
  1. Has the Tenant been asked to produce evidence that they have paid the rates on the premises up to date?

 

  1. Has the Tenant paid the service charge up to date?
  1. Have you granted your Tenant a short term letting (i.e. less than 5 years) that is about to expire?  Do you need to recover possession of the premises immediately on the expiry of the current term to prevent the Tenant claiming a statutory right to a new tenancy?

 

  1. Does the lease contain a break option which is exercisable this year? If so, has your Tenant complied with the notice requirements and paid any penalties due under the lease? Have you arranged to inspect the premises prior to exercise of the break option to prepare a Schedule of Dilapidations?
  1. Does your lease provide for a rent review this year? If so, have you complied with the obligations in relation to the rent review? For example, have you served notice of the rent review on the Tenant?     Have you engaged a professional adviser to assist in reviewing the rent?

 

  1. Have you visited the premises recently to ensure the Tenant hasn’t sub- let or changed the use without your consent?  Has the Tenant erected any signs or carried out any works which would be in breach of Planning Laws?
  1.  If the Tenant has carried out any works to the premises, did you approve the plans and specifications? Did you obtain a copy of any relevant planning permission obtained by the Tenant? Did the works require an application for an amended Fire Safety Certificate? Do you have a full planning file for the premises?  

 

TENANTS:

  1. Have you asked your Landlord to produce evidence that the buildings insurance is up to date? You are entitled to see a copy of the insurance schedule and evidence of payment of the premium.

 

  1. Have you discharged all rates including commercial and water rates due in respect of the premises? Have you got receipts to produce to the Landlord?
  1. Are you liable for any service charge in respect of the premises? If so, have you paid the service charge up to date and obtained a receipt?

 

  1. Are you planning on carrying out any works to the premises this year? If so, do you have a full set of plans and specifications to produce to the Landlord when applying for consent to carry out the works?
  1. Did you carry out any works to the premises with the consent of the Landlord since the commencement of your lease? If so, do you hold a comprehensive file of all planning documents for production to the Landlord if requested? This would include a copy of any planning permission obtained, a revised fire safety certificate (if applicable), a copy of any commencement notice served on the local authority prior to carrying out the works, an Architect’s Opinion on Compliance with or Exemption from Planning Permission, an Architect’s Opinion on Compliance with Building Regulations.

 

  1. Is your lease coming to an end? Do you wish to renew it? If so have you applied to the Landlord to renew/ extend your Lease?  If you do not wish to renew your lease and intend vacating on the expiration of your lease, have you complied with your repair covenant under your lease? Do you need to repaint or redecorate the premises before the end of your lease? Does your lease have a Schedule of Condition recording the condition of the premises at the commencement of the lease?
  1. Have you been in occupation for over 5 years? If so, have you looked into whether you now have a statutory right to a new tenancy of the property?

 

  1. Does your lease contain a break option which is exercisable this year? If you intend to exercise your break option what are your obligations under your lease in relation to service of notice on the Landlord and payment of penalties? Have you complied with your repair obligations under the lease? Do you need to remove any fixtures and fittings installed in the premises during the term of your lease? Do you need to contact your Landlord to arrange an inspection of the premises? If you have sub – let the premises have you taken steps to recover vacant possession from your sub-tenant?  

We appreciate that your obligations as Landlord and Tenant under a commercial lease can seem daunting but we hope that the information contained in this publication will help you focus on the issues which arise on an annual basis and of course our Property team are on hand to give you further assistance.  We also offer a property audit service whereby we will review your commercial lease arrangements and provide you with practical advice on the management of your property portfolio.

Grainne MacDougald
Associate
gmacdougald@hayes-solicitors.ie