Leasing a Commercial Property: Questions to Ask

Leasing a commercial property can be an exciting step for any growing business — but it’s also a process that comes with important legal and financial considerations. Whether you’re taking your first steps to leasing a commercial property or need expert advice on renewing or negotiating a commercial lease, our specialist solicitors are here to help.

We’ll guide you through how leasing a commercial property works, explain the key terms of a commercial lease, and ensure your agreement protects your business interests from start to finish.

For commercial property advice, contact a commercial lease solicitor in our Commercial Contract team. We have offices in York, Selby, Malton and Pickering.

1. Is the property in a suitable location?

The location of the property is important and linked to the commercial nature of the business you wish to carry out. We work closely with a number of local agents who are able to assist with any queries you may have in this regard.

2. Does the use of the property suit your commercial needs?

Before leasing a commercial property, ensure its current use aligns with your intended business activities. If the premises are used differently, you may need to carry out fit-out works, obtain planning permission, or meet building regulations — all of which can add time and cost.

Checking that the property already falls under the correct use class can help you avoid unnecessary expense. As part of our due diligence, we’ll confirm the property’s permitted use and advise you of any associated risks.

3. When does rent fall due and how much?

Commercial rent is often paid quarterly, but monthly payments may better suit your business. Both the amount and frequency of rent are negotiable with the landlord, and our lease specialists can support you throughout these discussions. You may also need to consider factors such as rent-free periods, future rent increases, or additional costs like insurance rent.

Speaking to our commercial lease solicitors early can help you secure terms that best support your business and cash flow.

4. Are there any restrictions on assigning or subletting the property?

If you need to leave before your lease ends, you may be able to assign the lease to a new tenant or sublet all or part of the premises. Each option has different implications, so it’s important to seek advice from your solicitor and accountant, especially as subletting income can have tax consequences. Most commercial leases require landlord consent for assignment or subletting, and you may need to enter into an Authorised Guarantee Agreement (AGA), meaning you remain liable if the new tenant defaults. Reviewing and negotiating these terms early can prevent costly issues later.

For more information on assignment and subletting, please see our alienation section in our Guide to Signing a Commercial Lease.

5. Is there a service charge payable?

Service charges are common when leasing a commercial property within a shared building or estate. They cover the landlord’s costs for maintaining common areas such as roads, paths, and bin stores. It’s important to understand which services are included and how your share of the costs is calculated. As part of our due diligence, we review all service charge provisions to ensure you know exactly what you’re paying for.

6. What is the length of the lease, and when does it expire?

It is important to consider the length of time that you may require use of the premises. Are you looking to lease a property on a short-term basis, or do you require the property for a considerable length of time? This will depend on a number of factors, including whether you are just starting up or you’re looking to expand.

7. Is the lease protected by the Landlord and Tenant Act 1954?

This Act gives commercial tenants the right to renew their lease at the end of the term, unless specific exceptions apply, such as planned redevelopment. However, most landlords seek to exclude these renewal rights so the lease ends on the agreed date. It’s essential to confirm this when reviewing the Heads of Terms, as your solicitor may be able to negotiate protection under the Act where appropriate.

For more information, please see our blog: Do commercial tenants have rights?

8. Is there a break option?

A break clause allows you to end the lease early if your business needs change, offering valuable flexibility. You can request one when negotiating your commercial lease, but landlords may also seek their own break rights. Either party must give notice within a set timeframe to exercise the clause, so it’s important to understand the conditions and ensure the break option works in your favour.

9. What rights does the lease grant, and what rights are reserved by the landlord?

Commercial leases set out both the tenant’s rights and those retained by the landlord. It’s vital to check that your lease includes everything you need to operate effectively — such as parking spaces, storage access, bin use, or rights of way over shared areas. Confirming these rights early ensures the premises are fully suitable for your business.

10. Is there a provision for rent review?

Many commercial leases include a rent review clause, allowing the landlord to adjust rent at set intervals. Reviews are often upwards-only, meaning rent can rise but not decrease, even if market values fall. The most common method is an open market review, though some leases use index-linked or stepped increases. Understanding when and how reviews occur helps you plan future costs and ensures transparency if you later assign the lease.

11. Are there any obligations on you to repair the property?

Most commercial leases require tenants to keep the property in good repair, but some go further, obliging you to put it into good repair — meaning you must fix any pre-existing issues. To limit liability, you can often negotiate repairs based on a schedule of condition showing the property’s state at the start of the lease. Your solicitor can help negotiate fair terms and arrange the necessary reports.

12. What are my obligations when the lease comes to an end?

Your commercial lease may require you to remove fixtures or alterations, redecorate, or return the property in good repair. A schedule of conditions can help ensure you only restore the premises to its original state. As end-of-lease obligations can be complex, it’s important to seek legal advice early. Our commercial property solicitors can review your lease and negotiate terms that protect your business.