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Commercial Property leases
Finding your way round a lease is not as easy as it seems.
"I'm only leasing it, not buying it!" is the common cry from prospective tenants, faced with having the details of a 40 page lease explained to them. The reality is that purchasing a property is often far less complicated. Leases are probably the most complex and most onerous agreements that many businesses will ever enter into. Unfortunately, many tenants do not appreciate that. The pitfalls awaiting the unsuspecting tenant (and non-specialist lawyer) are enormous. A commercial lease is normally drafted by the landlord's lawyer and revised by the tenant's lawyer. The same lawyers often act for both landlords and tenants in different transactions and understand the different perspectives.
Where both lawyers are experienced in the field, the landlord's lawyer will anticipate the likely revisals and the tenant's lawyer will normally put up a fight to get a reasonable deal. When the tenant's lawyer is not experienced, the landlord's lawyer will often take a much harder line - if he needs to!
The legal work involved in dealing with a commercial lease can often be out of proportion to the apparent value of the lease to a tenant, but the eventual cost to the tenant of cutting corners just to save on legal fees can be enormous. You can be liable for a complete new roof or unable to sell your business because you cannot pass the lease on to the proposed purchaser.
Heads of Terms
Prospective tenants (and also prospective purchasers/sellers) of commercial property are regularly being persuaded to agree heads of terms (statements of principal terms) with other parties or their professional advisers without realising that they are entering into a legally binding contract.
The law in Scotland now provides that any form of writing can create a binding contract in relation to land and buildings.
By the time we become involved it can be difficult to extract the client from what may be very bad bargain.
In any proposed deal relating to land or buildings, do not commit anything to writing or agree heads of terms without detailed advice from a specialist commercial property lawyer.
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