Commercial Lease Legal Advise

What is a full repairing and insuring lease?

A ‘full repairing and insuring’ lease or FRI means the tenant is responsible for all external and internal maintenance, decorations, and repairs as well as the liability for insuring the building. 

An internal repairing and insuring lease (IRI) means the incoming tenant is responsible for the repair and maintenance of the part of the building they occupy. With IRI leases, you will need to check the landlord’s repair obligations regarding the outside and common parts of the premises. 

Before entering the lease, make sure you have a full building survey undertaken. You can then ask for any existing dilapidation be excluded from your liability to repair. Also, you will have a better idea of the potential maintenance costs you will need to budget for over the life of the lease.

What is a rent review?

Most rents for commercial leases are paid in quarterly instalments. Your commercial lease agreement will undoubtedly contain a rent review clause. 

Open market rent reviews are the most common. They allow your landlord to review your rent at set intervals (normally every three to five years) to ensure they are receiving the market rate. In theory, rent could decrease in an open market review if the value of rents have dropped; however, most agreements contain a clause stating rent can only be revised upwards.

The rent review clause in your lease will contain ‘assumptions’ and ‘disregards’. These specify what a surveyor must consider (and not consider) when they are valuing the property for the purpose of a rent review. It is important to consider ensuring that any improvements you make to the property are disregarded in a rent review, otherwise, your landlord not only gets to benefit from the increased value of the property but also charge you more rent on the back of the work you paid for.

Why choose us?

Our commercial property lawyers are pragmatic and understand the business-related aspects of commercial leases, such as the need to insert a break clause in the tenancy agreement so you can quit the lease early if your circumstances change. 

We pride ourselves on our responsiveness – you can trust that your phone calls and emails will be quickly returned/answered, should you choose to instruct us. You can be confident that our experience and strong relationships with landlords in the Kent and South London areas will ensure your commercial property tenancy runs smoothly and fits your commercial requirements.