Property Services

Landlord & Tennant

Frequently Asked Questions on Landlord & Tennant

Q What is the difference between Leasehold and Freehold property?

A Essentially, freehold ownership of property gives the owner (known as the "freeholder") the right exclusively to occupy a piece of freehold property for an infinite period.

Leasehold ownership of property gives the owner (known as the "leaseholder") the right exclusively to occupy a piece of property for a designated period of years (known as the "term"), provided rent is paid on time and the rules of occupation (known as the "covenants") are obeyed.

Q What obligations will a lease normally contain?

A The obvious obligations are:

Tenant must:

  • pay rent (which may be subject to review);
  • keep the property in a good state of repair;
  • reimburse the landlord for its costs of supporting the tenant (known as the "service charge");
  • use the property only for the purpose(s) allowed by the landlord;
  • allow the landlord to inspect the property on reasonable notice

Landlord must:

  • allow the tenant to occupy the property without unnecessary interruption during the term;
  • insure the property (provided the tenant pays the premium as part of the service charge);
  • allow the tenant a reasonable opportunity to transfer occupation of the property to a third party by assignment or sub-lease


Other provisions will also be included when appropriate.

Q As I will only be taking a ten-year lease of the property, should I really pay to have it inspected by a qualified surveyor before I enter into the lease?

A Yes. Instructing a qualified surveyor to inspect the property is an important part of any lease transaction. This should not be overlooked. If you do not know of an appropriate surveyor, we will gladly provide you with a list of suitable individuals.

Q I have found the perfect property for my business at a rent that I can afford. The Landlord requires me to enter into a fully repairing lease but I am concerned by the property's poor state of repair. What should I do?

A Be careful. Speak to your surveyor about preparing a "Schedule of Condition" (evidence of the property condition at the beginning of the lease) and ask your solicitor to ensure that an appropriate form of repair clause is incorporated into the lease. This will limit your repairing obligations to putting the property back into the same state of repair at the end of the term as it was at the beginning.

Q Who insures the property - the Landlord or the Tenant?

A Generally, the landlord insures the property and the tenant reimburses the landlord costs of insuring. It is important to ensure that the landlord's insurance policy covers (1) the full reinstatement value of the property (including all VAT and professional costs) and (2) rental payments due while the property in uninhabitable. In certain cases, it may also be important to ensure that third party liability is covered.

Q What is a rent review clause?

A A rent review clause is a provision of a lease that takes effect periodically (normally every 3/5 years) by adjusting rental to a fair figure that takes into account inflation and market strength.

Tenants can expect their rent to increase in a booming market. In a down turned market a tenant's rent could be reduced. However, it is normal for a landlord to insist that the revised rent be the greater of the market rent or the rent paid prior to review. This kind of provision is normally referred to as an "upwards only" rent review clause as it ensures the rent will either remain constant or go up, but never down.

Q Can I make alterations to my leasehold property?

A It depends on the terms of your lease. Generally, a tenant is allowed to make minor alterations (moving/removing partitions etc.) without asking for the landlord's consent. Major alterations (knocking down walls, extending the building, inserting cabling etc.), however, will require the landlord's consent.

The tenant will be expect to pay the Landlord’s costs of investigating and approving the proposed alteration works.

Q I am an experienced landlord and have always conducted my affairs in a careful manner. Recently, I received an application from a newly formed company wishing to let one of my properties. Normally, I only deal with established companies, but this particular company is willing to pay a premium rent if I agree to accept them as my tenant. As a new company, they are unable to provide me with the usual references. How can I secure the higher rent but still protect my position?

A Landlords trying to protect themselves against bad tenants are always in a difficult position. In this type of situation the landlord ultimately is faced with having to take a view on his exposure - does the commercial benefit justify the potential pitfalls?

Should the landlord decide to proceed he would be wise to request one or all of the following:

  • personal guarantees from the company directors/investors
  • a rent deposit deed
  • a break clause
  • a court order preventing the lease from giving the tenant a protected business tenancy


While these protective measures are not supposed to provide foolproof protection, in the right circumstances, they can greatly reduce a landlord's exposure.

Q My business is growing fast. My present lease has come to an end and I need larger premises. Having found somewhere suitable, I am concerned that if my business continues to grow at the same pace I may need to move again in a few years' time. The new landlord insists that the lease term must be for at least 5 years. I would prefer a shorter term. What can I do?

A This is a common dilemma. The landlord is right to protect himself and the tenant must be respectful of that. The tenant's best way forward is to insist on the inclusion of a three year break clause within the lease.

A break clause of this type would enable the tenant to bring the lease to an early end on the third anniversary of the term. Although every break clause is slightly different, a tenant should expect to give six months' notice to the landlord of its intention to break the lease.

Tenants should be careful when exercising break clauses. On the break date, the lease will only come to an end if the rent is paid up to date and all of the tenant's lease obligations have been complied with.

Q My business lease is about to expire, can I renew it?

A Contact us urgently. The procedure for renewal of business leases is complicated and best left to qualified professionals. Time periods relating to receipt and posting of notices are paramount and you should not delay taking advice under any circumstances.