Delivering Quality Legal Services since 1996

Delivering Quality Legal Services since 1986

The Commercial Lease Process

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The steps involved in entering a lease can be intricate and confusing. Here is a step-by-step commercial lease process chart that will help guide you through the key stages of the process.

  1. Negotiation & Agreement on Heads of Terms

Where a property is marketed by commercial agents, the agents will be engaged to facilitate inspections, field questions on the property and also to seek to agree the key points for inclusion in the lease (referred to as the “heads of terms”). These form the basis on which any lease documentation is prepared but they are non-legally binding.

  1. Solicitors Instructed

Once the heads of terms are agreed the agent will circulate these to both parties and their solicitors which then essentially begins the legal process. In terms of timings generally, and whilst every transaction is different, from the issue of heads of terms to completion of the lease generally takes between 4-6 weeks.

  1. AML and Client Care Details

Once solicitors are instructed, in line with the Money Laundering Regulations 2017 the solicitors will then need to undertake certain anti-money laundering checks. At this stage it is important to note that the solicitor will not be able to progress matters without holding the required ID and having undertaken the associated checks and it is important therefore that clients are aware of this and are able to provide the information required promptly. In addition to AML requirements, the client should also receive confirmation on the firm’s terms of business and client care letter confirming its practices and charges for the transaction.

  1. Tenant Solicitor Confirms Instruction and Requests Draft Papers

Once the above has been satisfied, the tenant’s solicitor will confirm instruction to the landlord’s solicitor and formally request draft papers together with replies to pre-contract enquiries (“CPSEs”) and draft lease documentation for review.

At this time the tenant’s solicitor will also liaise with the tenant as regards specific searches the tenant may require or specific concerns or issues to be explored. In terms of searches generally, these broadly consist of local authority, environmental, water and drainage, chancel repair and highways (although additional searches may be relevant depending on the location of the property).

  1. Due Diligence and Lease Negotiations

Once the requested documentation is received from the landlord’s solicitor, the tenant’s solicitor will then review these and liaise with the tenant as regards the same including reporting on specific issues or concerns revealed by responses to pre-contract enquiries or searches.

With regards to negotiation of the lease documentation, commonly this goes back and forth between solicitors on several occasions, taking 2-3 weeks to iron through to a format acceptable to both parties.

  1. Report on Lease

Once the terms of the lease and associated documentation have been agreed, the tenant’s solicitor will generally prepare a report on the key terms of the lease for the tenant’s approval.

  1. Completion

Once documents are finalised, these will be circulated for signature by all parties. Once duly executed and returned to the solicitors (and the tenant has lodged any required monies (i.e. advance rent payments or rental deposit etc.), the matter will proceed to completion – generally over a telephone call between the parties solicitors whereby the lease is agreed as completed and dated.

On completion of the lease, the landlord’s agent will be instructed to release the keys to the tenant who will then take possession of the premises and will be liable to comply with the terms of the lease.

  1. Post Completion Formalities

Whilst requirements post completion vary depending on the length and value of the lease, commonly these include the registration of the lease at HM Land Registry (where the lease is granted for a term exceeding 7 years) or noting of the lease and registering of any easements thereunder (where the lease is granted for a term between 3 and 7 years), and preparation and submission of a stamp duty land tax (SDLT) return (and payment of any associated liability).

If you require advice on a new lease or need a solicitor to renew an existing lease, then call us today on 0121 268 3208 or send us an email at with your query and we will get back to you.


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