A well drafted commercial lease is one of the most important tools a landlord has. It does far more than simply record the rent and term, it protects your investment, reduces the risk of disputes, and helps ensure a smooth relationship with your tenant.

Unfortunately, many landlords rely on outdated templates or agreements that do not properly reflect the realities of modern commercial property management. Small mistakes can lead to expensive problems later down the line.

Here are five key provisions every landlord should make sure are included in their commercial lease.

1. A clear rent review clause

Rent review clauses are essential in longer commercial leases. Without one, landlords may find themselves locked into below market rent for years.

The lease should clearly set out:

• When the rent review takes place;
• How the new rent will be calculated; and
• What happens if the parties cannot agree

There are different types of rent review mechanisms, including open market reviews, index-linked increases, and fixed uplifts. Choosing the right option depends on the property, the market, and the type of tenant.

2. Repair and maintenance obligations

One of the most common areas of disagreement between landlords and tenants is responsibility for repairs.

Your lease should clearly specify:

• Who is responsible for internal repairs
• Who maintains the structure and exterior
• Whether the tenant must keep the property in “good repair” or simply maintain its current condition

This distinction is particularly important in older buildings, where tenants could otherwise inherit significant repair liabilities.

3. Service charge provisions

If the property forms part of a larger building or estate, the lease should include comprehensive service charge provisions.

A good service charge clause should explain:

• Which services are provided;
• How costs are calculated;
• When payments are due; and
• Whether there is a cap on expenditure

Clear drafting helps avoid disputes and gives tenants transparency about what they are paying for.

Landlords should also ensure the wording allows enough flexibility to manage the property effectively as costs and services evolve over time.

4. Rights to recover possession

No landlord enters into a lease expecting problems, but it is important to prepare for situations where things go wrong.

Your lease should contain robust forfeiture provisions allowing the landlord to recover possession in certain circumstances, such as:

• Non-payment of rent;
• Breach of tenant obligations; and
• Insolvency

The lease should also address what happens at the end of the term, particularly where the security of tenure provisions under the Landlord and Tenant Act 1954 have been excluded.

Careful drafting in this area can save considerable time and expense if disputes arise.

5. Restrictions on assignment and subletting

A tenant’s business circumstances can change during the term of the lease, and landlords should carefully control whether the property can be assigned or sublet.

The lease should clearly state:

• Whether assignment or subletting is permitted;
• What conditions apply; and
• Whether landlord consent is required

This helps landlords retain control over who occupies the property and protects the value and reputation of the building or estate.

It is also sensible to include authorised guarantee agreement (AGA) provisions where appropriate, giving landlords additional protection if the original tenant assigns the lease.

Conclusion

A commercial lease should never be treated as a “one size fits all” document. Every property and every landlord’s priorities are different.

Taking the time to ensure your lease is properly drafted at the outset can help avoid disputes, protect your investment, and provide greater certainty for both parties.

If you are granting a new commercial lease or reviewing an existing one, obtaining specialist legal advice early on can make all the difference.