A business lease is a legally binding contract between the legal owner (Landlord) and the occupier (Tenant). Failure by either party to comply with the terms of the agreement could result in court action. The 2007 Code for Leasing Business Premises (‘the Lease Code’) provides a framework within which a prospective tenant can reasonably expect a landlord to operate. As a prospective tenant, you should not assume that a landlord complies with the Lease Code. The Lease Code does not provide all of the protection you need for your business in leasing premises. Sometimes the Landlord is also the tenant of another owner. This may restrict the flexibility of terms the Landlord can offer. The Landlord should always state in advance if this is so and provide a copy of the current lease. If it is proposed to buy an existing lease (assignment) from someone else, be aware that, though parts of this Occupier Guide may help in interpreting some of the terms of the lease, there may be many additional liabilities. Professional advice from a qualified surveyor and a lawyer should be sought.
The Landlord is the owner of the property or the person owning an existing lease of the property. The Tenant is the occupier of the property or the person paying rent to a landlord. Heads of Terms is a summary of the agreement between the parties and is used to instruct lawyers to produce the formal lease. Both the lease and the Heads of Terms should comply with the recommendations of the Lease Code but the Heads of Terms will be superseded once the lease has been granted.