The Language of Leases
Like most other legal documents, leases tend to use language which isn’t especially consumer friendly.
Here a few terms you are likely to see in the average commercial lease with a plain English definition:
Alienation
Dealing with the premises either by transferring the lease to someone else, subletting or sharing occupation of the premises
Assignment
Transferring the lease to someone else
Authorised Guarantee Agreement
A guarantee entered into by a tenant when it transfers a lease to someone else.
Break Clause
A clause in a lease giving the landlord or the tenant (usually the tenant) the right to bring the lease to an end early
Covenants
Promises by one party to the other to do (positive covenants) or not to do (restrictive covenants) something
Demise
The extent of the property you are renting. The extent of the demise may be defined in great detail in a lease. For example, the lease may state whether the demise includes the structure, roof and exterior of a property. A tenant’s obligations in a lease only tend to apply to those parts of the property included in the demise so it’s an important definition.
Dilapidations
A general term describing the physical state of premises arising from the tenant’s failure to observe its obligations in the lease relating to repair and decoration of the premises
Distress
The seizing of a tenant’s possessions in the premises by the landlord in satisfaction of monies owed by the tenant
Engrossment
Preparing the final copy of a legal document for signature
Excluded lease
A lease where the tenant’s statutory right to a new lease at the end of the term has been removed
Forfeiture
The termination of a lease by a landlord as a result of the tenant’s breach of one or more of its obligations in the lease
Grant
Giving someone rights. In the case of a lease the grant is of the right to occupy premises for a certain period of time.
Keep open clause
A clause sometimes found in a lease of retail premises requiring the tenant to actively trade from the premises throughout the term of the lease
Lessor
The Landlord
Lessee
The Tenant
Reservations
Rights that the landlord retains over the property you are renting eg rights of access to inspect the property.
If you are about to sign a commercial lease and concerned about terms you don’t understand, take advice from an experienced Commercial Property Solicitor. Cousins Business Law property specialist, Steve Petty, offers a free initial lease review.
To book a free telephone lease review, complete our Book Appointment form stating that you would like a lease review in the Enquiry Details. Alternatively call Steve Petty on 01926 629005.
Article added: 25 November 2008 © Cousins Business Law
This article is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free 30-minute telephone advice session to discuss your particular circumstances.
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