A commercial lease is often a complicated and lengthy document. It deals with a wide variety of subject matters from basic details such as the names of the parties, a description of the property and the fixed term (length) of the lease to more complex issues such as the rights, obligations and remedies of both landlord and tenant, calculation of service charges and rent reviews.
Generally, the contents and presentation of a lease do not have to follow any prescribed form or structure and therefore how the lease is presented will vary depending on the particular style of its author.
However, generally the contents of a lease will be ordered as follows:
A well drafted lease should begin with a contents page.
In England and Wales new regulations came into force on 19 June 2006 requiring all new leases to be registered at the Her Majesty's Land Registry (HMLR) to contain certain 'prescribed clauses' which must appear in a schedule at the beginning of the lease. Leases with a term of seven years or more must be registered at HMLR. A tenant has an option over whether or not to register a new lease if it has a term of less than seven years. The 'prescribed clauses' are essentially a summary of the main clauses or information contained in the lease which HMLR need to refer to when dealing with the registration process.
In Northern Ireland only commercial leases for longer than 21 years must be registered at the Land Registry of Northern Ireland.
Depending on how the lease has been drafted, the next part would contain the date of the lease and the names and addresses of the parties. The date of the lease will usually be left blank for the parties to fill in manually on the day of completion.
The majority of leases contain a section defining particular words which are repeatedly used in the document and bear a specific meaning. It is convenient to define these words under a definition section so avoid needless repetition of recurring words and phrases. Words that have been defined will start with a capital letter so that they are easily identified in the lease.
In a commercial lease, it is common to define the following words:
Leases also contain a small section to clarify any potential issues regarding its interpretation, such as confirming that any references to a particular gender are also references to the other or that the reference to an Act of Parliament also includes an amendment or modification of it. These are usually standard clauses which appear in most commercial agreements.
This part of the lease will specifically refer to the landlord granting a lease of the property to the tenant for the specified term together with certain other rights on the condition that the tenant pays the rent and complies with various covenants (promises to do or not to do certain things). The landlord will also reserve certain rights and easements (a right to use someone else's land for a specific purpose, e.g. to walk on their pathway) for their benefit. A list specifying the rights and covenants for each party would usually be found in separate schedules.
Most of the detail of a lease can found in its schedules. The following matters are usually contained in schedules:
Grouped together under the heading of provisos are a variety of clauses that cannot be easily dealt with elsewhere in the lease. These clauses are neither in the nature of covenants nor easements nor do they impose obligations upon the parties. Sometimes the provisos are contained in a separate schedule of their own. Examples of provisos include:
This page will contain the details of the parties and appropriate wording (which differs depending on whether a party is an individual or company) so that the lease can be signed by the parties. If a party is an individual, their signature must be witnessed by an independent adult witness who must also sign the lease and print their full name, address and occupation on it.