Commercial lease terms explained

Lease length:

The period the lease runs for and whether either party can end it early.

Break option: A right for the landlord, the occupier or both to end the lease on specified dates, subject to the conditions in the agreement.

Rent and rent review:

The rent payable and how or when it can change. The lease should explain the review dates and the method used.

Permitted use:

The activities the occupier can carry out at the property. Check that the wording fits the intended business and any planning restrictions.

Repairs and condition:

The lease explains who must repair the property. Consider the extent of an occupier’s repairing obligation alongside the property’s condition at the start of the lease. A schedule of condition can help record that starting point.

Service charge and insurance:

These clauses explain which shared costs the occupier may need to contribute to and how the building is insured.

Assignment and subletting:

These terms cover whether the occupier can transfer the lease or sublet the property, and whether consent is required.



The RICS leasing code recommends that landlords and occupiers understand the commitments they are taking on and use heads of terms to record the main points before preparing a lease. 

Heads of terms summarise the key points for negotiation. They are not a substitute for reading the lease. Ask a solicitor to explain the legal wording, including any repairing covenant, break conditions, guarantees or other obligations that could affect your position.



The lease and related legal requirements can vary across the UK. Get advice that applies to the property’s location and the specific agreement.

North360 can help landlords and occupiers discuss the commercial terms of a property deal. For legal advice on a lease, speak to a solicitor.

RICS Code for leasing business premises