okay in today's video I'm going to take a look at what's involved in a
commercial lease that is you're taking on some sort of a premises you've been
granted a new lease or perhaps you're being given an existing lease a lease is
being assigned to you but for the sake of this particular video I'm going to
look at what's involved in the lease what are the constituent parts of us now
before we go through the lease one thing I would emphasize very very strongly is
that the lease is only one part of the relationship between you as a tenant and
the Landlord and the premises what I mean by that is that there are other
issues that need to be looked at outside of the specific four walls of the lease
and what I'm referring to there would be things like planning issues planning
permission and building control regulations and so on building
regulations for the premises I'm referring to good title that landlord
has good title to give you or grant the lease once various external factors have
been looked at and satisfied that is planning good title outgoings rates
mines no company fees and so on then you're looking at a lease the lease
we're gonna look at in this video is a typical full repairing and ensuring
lease for letting of an entire building with a guarantee now your lease may or
may not involve a guarantee don't be too concerned about that it's precisely the
same principle it's precisely the same type of lease this lease then as I say
we'll go through it and we'll see what's involved so firstly the early part of
the lease is going to set out landlord tenant on the guarantor if there's a
guarantor the lease will then just basically hear summarize the term and
the number of years so it could be four years and nine months it could be 10
years 15 years 20 years 30 years whatever length of time is a grade
between landlord and tenant rent reviews then would normally be carried out every
five years but it could be carried out every seven years or every three years
but generally it would be failures and then the initial rent is
gonna be summarized here so it'll be euro figure oversee and it will be
including or excluding fat that's something that you need to be very very
careful about it will be subject to review and review and take place
whatever number of years is greed so if you look at the beginning of the late
set to set out who the landlord is who the tenant is and who the guarantor is
if there is a guarantor then you're gonna have a number of definitions as a
none illegal document any contract and it is a contract essentially you're
gonna have definitions sort of refer to the property and various other
definitions there's no need to go through that too carefully at the moment
except to draw your attention to one point five years which says the demised
premises so that's referred to its described rather in a four schedule
that's the premises that you're renting you need to be careful about that and be
careful that you're getting precisely the premises that you think you're
getting so the initial rent will be referred to here and it'll say what the
initial rent is so 10 grand 15 grand 50 grand over or whatever it is every year
you're gonna have insured risks that's a standard sort of a standard sort of a
clause you have an internal declaration here and an external declaration here
there will be obligations to decorate the premises internally and externally
again check the lease see what is the obligation is that every year every
three years every five years or whatever outgoings then would be referred to here
as you can see and out coins would include the likes of commercial rates
taxes charges management company fees I think that's affecting the premises are
non going out going or an ongoing yearly basis the committed user is important
you may have a permitted user as you may be permitted to use the premises as for
example a nail bar or a hairdressing salon then you cannot turn around if
that doesn't go well and turn it into a fast-food takeaway or something of that
nature without the consent of the landlord plan then here refers to the
plan if any annexed to the least so that would be the map or plan of the premises
that you're getting planning acts refers to obviously
playing acts generally and that's a sort of a sort of a boilerplate definition
quarterly Gale days most leases will make provision for paying rent either
monthly or quarterly so if its quarterly it may well be the first day of January
1st of April 1st to July 4th October and so on the rent commencement date will
tell you when the rent commences so you could enter into a lease on the 1st of
January but you may get a rent a free period of say three months or something
in which case the rent commencement date won't be able to see a
marked area for long whenever the tenant then obviously refers to the particular
tenant you if you're taking it on term is a number of years the commencement
days again if it's a fourth of January lease for example or the fourth of July
lease that the really commencement days utilities then that's obviously fairly
self-explanatory interpretation then that's more definition is quite frankly
it deals with who's landlord is and so on and it refers to references to the
landlord and any reference to cause or sub-clause that's all sort of
boilerplate stuff number three then is important
basically the meat and drink of this lease Annelise is where the landlord
demises our premises onto the tenant together with certain other rights
subject who writes easements and privileges and so on and so forth
so basically the landlord assigns the premises or demises the premises rather
to the tenant under certain conditions and those conditions are set out in the
lease here then you're going to have a whole series of tenants covenants so
basically the most important covenants that the tenant is going to give by
entering into the lease would be a to pay the rent be to pay outgoings and see
the carrier who pairs repairs then will depend on the or rather the extent of
the repairs will depend on whether it's an internal or full repairing ensuring
lease or not if it's a short-term lease it may well be that you're only
responsible for internal if it's a fully repairing insuring lease
for a long-term for example 10 15 20 years then the likelihood is you're
going to be responsible for external repairs in addition to the internet so
be careful about that and make sure you know exactly what the story is
decorations tend to be carried out in a good and Rockman like manner and so on
the tenant also covenants to keep all parts of the premises clean and tidy and
the to maintain errs and then at the expiration or sooner of the term in
other words when the lease is over to give up the premises to the landlord
again the tenants fixtures and effects then whatever the situation is in
relation to fixtures and fittings that'll be set up their common
facilities you may be required to pay to the landlord some contribution some
proportion of the overall expense so it could be a multi-unit building there may
be common areas may be common stairs or lists or something of that nature or
indeed it could be a shopping center if there's common facilities then there's
going to be a contribution requested from each tenant of each premises rates
eventually by the landlord the landlord will be permitted to enter the premises
from time to time under certain conditions and the tenant also covenants
to comply with notices and in notices that are served on the tenant so the
landlord may say look at your invoice your condition or you're making a
covenant here's an office to that effect then your must comply order that's an
obligation of the tenant then the tenant must also give a covenant in relation to
the operation of the demise premises in other words not to carry on a business
or operate the premises in such a way that it causes a risk to the premises or
a risk to the insurance or a risk of basically the place going up in fire or
something of that nature user then again is not without the prior written consent
of the landlord to use in the Meijer premises except for the permitted user
in other words if it's an ale buyer or hairdressing salon that's what you can
do you can change it but you need the consent of the landlord you need the
prior written consent of the landlord that's important you also need to
it's a factory in alterations in other words what sort of alterations are
permitted and what sort of alterations and mic required the written consent of
the landlord you must also consider that alienation alienation involves selling
your lease or transferring at least somebody else you will need the written
consent of the landlord he or she cannot withhold this unreasonably but is
entitled to get a tenant as good as you were
likewise landlords expenses to pay an identified landlord against all costs
arising from the preparation of notices or the recovery or attempted recovery of
rears so if the tenant is in breach of the lease in relation to for example a
non-payment of rent and the Landlord strictly speaking is entitled to recover
his expenses in pursuing his rent statutory requirements again the tenant
is obliged to comply with various and all statutory requirements most
basically uphold and enforce the law and then re letting in a planning
application notices the landlord is permitted the covenant of the tenant is
to permit a landlord at all reasonable times that put up notices about
relenting 2/10 the premises and so on when it comes to that the Canon also
gives an indemnity to the landlord to indemnify him
the landlord against all actions and proceedings claims arising from the use
of the premises and then the tenant also covenants to pay stamp duty and value
our attacks if value-added tax is appropriate and he's been charged on the
lease the tenant will also have to take out insurance and may need to make a
contribution to the landlord's insurance of the entire building again that's
something that you'd want to be looking at closely with your solicitor but there
will be an insurance covenant on the tenant in the lease you'd then go on to
a section 5 here you'll see landlord's covenant so basically the landlord
covenants with the tenant to allow the tenant to quiet enjoyment of the
premises provided the rent is paid and so on and so forth the landlord will
also covenant to ensure the premises ensure the building and look for
contribution perhaps from the
the landlord will also covenant then who or the guarantor may give covens then if
there's a guarantor and the guarantor may make covenants basically to cover
any shortfall of rent or pay the rent essentially for the tenant if there's
any breach and we go down further than disclaimer or forfeiture that's kind of
an obscure one does if a liquidator or official assignee is appointed that the
lease may well be forfeiture in other words given back to the landlord or the
liquidator if necessary the various provides us then but one of the most
important providers will be forfeiture in other words under what circumstances
can the landlord for faith the lease it may well be that non-payment of rent
particularly for a period of time particularly after notices having been
served and failure by the tenant to comply with the notices failure to pay
the rent will lead to a forfeiture situation whereby the landlord is
entitled to go to court and forfeit the lease in other words take the lease back
off the tenant covenants relating to adjoining property it may arise it may
not arise but you need to be careful there that no adjoining property is
affected by the lease that you enter into and thus any rights of way that you
might need down the side of a building or that sort of thing or perhaps a
common area for example for the storage of waste or waste collection and you
know you're clear on the situation there the applicable law then will be Irish
law and you may have a situation where you as a tenant negotiate a break cause
or an option day's an option day allows you to terminate the term of the lease
and at a particular days as of the expert if you learn umber of years of
the term of the lease so that's something you need to be careful about
you try to negotiate that at the outset just in case business doesn't go grave
it may not go quite as well as you hoped then you may look for break laws and
that's a good sensible thing to do you could look for break clothes after a
year or three years or five years or after say three years and failures or
something of that nature obviously the landlord won't be that
anxious for that and if you were he agrees to break cards for you he'll be
looking for great clothes for himself but that's just the nature of
negotiations and so forth finance certificates except if it gets
doesn't arise now Assante assent the landlord n will assent to the
registration of this lease is a burden on the property comprised in the folio
this means that the property here that's been demised that's the subject matter
of the lease is going to be carved out of register or of a leasehold already
freehold folio rather that the landlord owns and he will be consenting to you
registering your lease as a burden on his folio for sure you learn is the
device premises so it'll set out exactly what the premises is and may well have a
map attached it should have a map attached if there's any doubt or
ambiguity as to the extent of the premises that you're renting ancillary
rights there may be other rights or attaching and key to the premises or key
or use of it and there may be exceptions and reservations in other words the
landlord may reserve to himself the right to go down the side of the
building for example with a wheelbarrow or so many of that nature it depends on
the premises there may be exceptions and reservations read reviews then this is
important Clause this will set out the basis on which renter views how retro
views are to be carried out and basically how often they're to be
carried out and obviously in the event of the usual dispute about the rent
landlord wants more money than the tenant is prepared to pay then it'll set
out what the position is in relation to the use of for example arbitration to
arrive at a figure opportunity rent review that's not the constitutional
position now that's been changed rent reviews can go down as well as what used
to be the case that they were upward only Rett reviews and that was
constitutional but I was knocked down a few years ago in Supreme Court it is
unconstitutional to have a lease with only an awkward only retro view
this agreement or determination of the reviewed rent again that's to do with
arbitration how disputes are to be resolved if and when there's a dispute
about the rent hope you find this video useful a notes of your long run but it
quite frankly it's taken 15 minutes for me to do it it's gonna take your it's
going to take your solicitor a longer much longer period of time to take the
necessary steps to ensure that you're protected and safe in terms of taking on
the lease but when I say to you this video is taking 15 minutes you should
not rush into a commercial lease because remember you're entering into a covenant
or concept by which you're gonna pay rent for 5 10 15 20 years so you better
get your due diligence known at the outset you better make your necessary
inquiries and the 15 minutes that you might spend watching this video hope you
find it useful if you do give the thumbs up down below and you may be interested
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