Signing a Commercial Lease: What to Ask

Are you preparing to sign a commercial lease for your business premises? Understanding what to look for before you commit is essential — from rent terms and repair obligations to potential restrictions on how you can use the property. This quick guide outlines the key questions to ask before signing a business rental agreement, helping you make informed decisions and avoid costly surprises.

Can’t find an answer to your question? Contact our commercial contract solicitors today for expert guidance on your commercial lease.

What type of commercial property are you renting?

Before signing a commercial lease, both landlord and tenant should clearly define the property being leased. Are you renting the entire building, or just part of it — such as a single floor or office suite?

This distinction matters. If you’re leasing only part of a property, you’ll likely share corridors, stairways, or other communal areas with other tenants, and may be responsible for a share of the maintenance costs. Understanding exactly what’s included in your lease will help you plan for these additional expenses.

Can I legally use the commercial property for my business?

As a tenant, it’s essential to ensure that the property’s permitted use aligns with your intended business activities. For example, if you plan to operate a retail store, the lease must specify that retail use is allowed. Similarly, if you’re using the premises mainly for storage but also need office space, the lease should expressly permit office use. Confirming this early helps you avoid breaching the lease or needing additional permissions later.

How much is the rent on commercial property, and when do I have to pay it?

The landlord and tenant must agree on the rent amount, but it’s important to understand how that figure has been determined. It is typically based on the property’s market rental value. You should also confirm when rent payments are due and whether they’re made monthly or quarterly to ensure the arrangement suits your business’s cash flow.

When do you need to pay commercial rent?

Most commercial leases require rent to be paid quarterly (25 March, 24 June, 29 September, and 25 December). However, some landlords and tenants prefer monthly payments to better suit cash flow. The payment schedule can be negotiated before signing the lease, so it’s worth agreeing on terms that work for both parties.

When does the rent start on a commercial property?

The rent commencement date is the point at which rent payments begin. While some leases require rent from the start date, others include a rent-free period to give tenants time to move in or fit out the premises. For example, if the lease begins on 13 September but rent starts on 13 October, the tenant benefits from one month rent-free. This can often be negotiated before signing the lease.

What is a commercial rent review?

For longer leases, rent reviews allow the landlord to adjust the rent at agreed intervals — typically every few years. Reviews can follow different methods, such as open market or stepped rent reviews, so it’s important both parties understand when and how these will occur.

Landlords often prefer upwards-only rent reviews, ensuring rent can rise but not fall, while tenants may seek upwards and downwards reviews for greater fairness. Whatever is agreed should be clearly stated in the lease before signing to avoid future disputes.

Landlord’s consent when selling your business lease

If you plan to sell your business or move premises, you must check whether your commercial lease allows this. Most leases include an alienation clause, which permits the tenant to assign their lease to a new tenant — but only with the landlord’s written consent. Landlords typically restrict assignments to the whole property (not part) to avoid complications like dividing rent or maintenance costs.

Before granting consent, the landlord will assess the new tenant’s financial position to ensure they can meet rent and other obligations. In many cases, the outgoing tenant must also sign an Authorised Guarantee Agreement (AGA), guaranteeing the new tenant’s performance under the lease. If the new tenant defaults, the landlord can recover losses from the outgoing tenant under the AGA.

Can you sublet a commercial property?

Subletting allows a tenant to rent out all or part of the premises to another party while remaining responsible under the original lease. This differs from assignment, where the lease is fully transferred to a new tenant.

Landlords usually require written consent before subletting and will want to confirm that any subtenant is financially reliable. Many commercial leases restrict or prohibit subletting altogether to maintain control over how the property is used. A commercial solicitor can review your lease and advise whether subletting is permitted before you sign.

Who is responsible for repairs on a rented property?

Most landlords will want the rent to be on a “clear rent” basis, meaning they receive the full rental amount and the tenant covers the cost of repairs. This is known as a full repairing lease. Tenants must understand the extent of their repair obligations — especially if leasing only part of a building — and ensure the area they must maintain is clearly defined in the lease.

The wording of the clause is crucial. An obligation to “keep” the property in repair also requires the tenant to put it into repair, even if it was already in disrepair at the start. To limit liability, tenants can refer to a schedule of condition, which records the property’s state at the lease’s commencement.

Tenants should also ensure they are not responsible for damage caused by insured risks or inherent defects (issues due to poor design or construction), which should remain the landlord’s responsibility. As with most commercial lease terms, repair obligations should be carefully reviewed and negotiated before signing.

What are term and break clauses in a commercial lease?

Both landlord and tenant must clearly agree when the lease starts and ends. Some tenants may wish to include a break clause, allowing them to end the lease early (for example, after five years), provided they follow the conditions set out in the lease.

Lease length also affects Stamp Duty Land Tax (SDLT) — longer leases generally mean higher tax, and no refund applies if a break option is used. A shorter lease with an option to renew can sometimes reduce overall SDLT liability.

The Landlord and Tenant Act 1954 gives business tenants security of tenure, meaning they can remain in occupation and request a new lease when the term ends. Landlords, however, often prefer to exclude these rights (“contract out”) to retain flexibility.

Our Commercial Property team can help you negotiate fair lease terms, understand your tax position, and ensure your agreement reflects your commercial needs before signing.

For more information on the LTA 1954 and the process involved, please see our blog: Do Commercial Tenants Have Rights?

For further advice, feel free to contact a member of our Commercial Property Team.

How Crombie Wilkinson can help

If you are a commercial tenant or planning to rent a business property, our experienced Commercial Property solicitors can guide you through every stage of the leasing process. We’ll explain the key terms of your lease, highlight any risks, and ensure your agreement protects your business interests.

Contact our team today to speak with one of our commercial property experts and find out how we can assist you.