10 top tips for navigating your next commercial lease

Making the decision to grow or move your business is a big step — one that can bring both exciting opportunities and unexpected challenges.

Failing to fully understand what you’re committing to when signing a commercial lease can be the difference between success and failure for your business.

Whether you’re looking for an office, a light industrial unit, or retail premises, here are 10 key things to watch out for in your next commercial lease:

1. Understand your on-going costs

Request a full breakdown of annual rent and payment frequency (annually, quarterly, monthly). Ask for estimated service charges covering maintenance, utilities, council rates, and contents insurance. Confirm whether VAT applies.

If leasing part of a building, clarify repair and buildings insurance obligations. Typically, landlords maintain the exterior and common parts, but tenants are usually responsible for internal repairs.

2. Check whether there will be a rent review

For leases over five years, expect rent review clauses. Landlords often require ‘upwards only’ reviews—meaning rent won’t reduce if market rates fall. Sometimes fixed increases are agreed instead. Understand when and how rent reviews occur to avoid surprises.

3. Find out if there’s a break clause

Break clauses allow landlord or tenant to terminate early with proper notice. For tenants, an unconditional break clause is vital to retain flexibility, especially in uncertain markets.

4. Document the state of repair of the building

Tenants usually handle interior repairs. For leases over five years, get a surveyor’s report on the property’s condition. Landlords often expect premises to be returned in good repair—even if initially poor. A schedule of condition attached to the lease can protect tenants from excessive repair obligations.

5. Plan alterations beforehand

Consider any planned changes to the property and secure landlord’s permission before signing. Failing to get approvals upfront can cause costly disputes later. Prepare detailed plans if necessary. Ask your solicitor about a licence for alterations.

6. Check your security of tenure (right to say)

Be aware of “opting out” of the Landlord and Tenant Act 1954, which removes your automatic right to renew the lease. If the lease excludes security of tenure, you may have to vacate at term end unless both parties agree otherwise.

7. Understand Stamp Duty Land Tax (SDLT) implications

Stamp duty applies not just on freehold purchases but also on lease premiums and rent where the net present value exceeds thresholds (currently £150,000 including VAT). Confirm your SDLT obligations early to budget accordingly.

8. Clarify permitted use and restrictions

Ensure the lease clearly states what you’re allowed to use the premises for. Restrictions on use (e.g., no food sales, no noisy activities) can limit your business plans or future expansion. Check if there’s scope to vary permitted use with landlord consent.

9. Negotiate repair and dilapidations obligations

Repair obligations and end-of-lease dilapidations claims can be a costly hidden risk. Aim to negotiate clear, fair terms limiting your liability. Consider caps on dilapidations or tenant-friendly exit provisions to avoid expensive surprises.

10. Work with a responsive legal team that understands your business

Choosing solicitors who specialise in commercial work and understand your priorities is crucial. Fast, clear communication and proactive advice can keep your lease negotiations on track, helping you meet deadlines and avoid costly delays or misunderstandings.

In summary: Understanding these elements will help you avoid pitfalls and secure a lease that supports your business growth. If you’re considering a commercial lease, our team is ready to guide you through the process — moving fast, communicating clearly, and ensuring your lease works for you.

Find out more from Couchman Hanson

At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We’re highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.

Call 01428 774756 or visit couchmanhanson.co.uk.