What is Business property lease?

Published: 14th May 2012
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Business property lease is a written agreement between a landlord and a tenant. The type of lease agreement is also called as commercial lease agreement. It is usually suitable for premises used for business purposes whether small or big size such as: offices, corporations, factories, workshops, shops etc. Another significant element of this business property lease document/agreement is that it can be used both for long term and short term lease.

Generally, the business property lease documents covers all necessary and important areas of commercial tenancy for example: rent, space occupied, length of lease, obligations and rights from both parties (landlord and tenant). A distinctive element of business property lease agreement is that it provides an exclusive possession to the tenant over the property. The landlord however cannot enter except in certain circumstances mention in the business lease licence.


There are two types of business/commercial property lease templates which is also known as commercial tenancy agreement.


Long term business property lease: suitable for long-term lease or for occupation of all types of property.

Short term business property lease: convenient for few months tenancy up to two –three years. It is also suitable for the short term occupation of all types of commercial property

Despite of the above types, the recent changes in governing law for business property lease in Scotland, Wales and England said that the business or commercial property lease is suitable where the term of lease is not more than seven years. In England and Wales the grant of a lease for longer than 7 years must be registered at HM Land Registry. From 19 June 2006 any lease granted in England or Wales for a term of more than 7 years for a property registered with HM Land Registry must commence with a set of prescribed clauses known as clauses LR1 to LR14. For a detail description of these clauses, you must go for the other sections of business property lease provided by Net Lawman.

The business property lease agreement whether of long term or short term has slight differences in Scottish version in terms of responsibility of repair and maintenance and services charges on tenant. Moreover, the Scottish version of Business property licence requires no range of forms and notices. Only the lease document itself is required.

Before going to sign any business property lease, make sure to understand what the lease covers, hidden costs and other terms and conditions from the landlord.

Sup[pose you are going to sign a shop lease agreement, your lease agreement then must covers the rent amount, rent review, lease length( time period), Guarantor, Payment provisions, break clause( premature termination), repair and maintenance conditions, sub-letting, insurance, lease renewal, termination and many other things must include in your business property lease agreement.

It is also advisable to negotiate the hidden costs before signing the business lease agreement. For example, who is responsible for the service charges other than rent? Service charges include: heating, fixing, cleaning and lighting charges. Who is responsible for the repairs and maintenance charges and who pay the insurance?


Other than lease, business property licence is another important document to keep in mind while heading to a small business. The business property licence is suitable and important for small business looking for a short-term property solution for up to one or two years.  The licence generally is flexible and can easily be terminate at a short notice on both sides. As compare to business property lease, a business property licence holder would not have a right to renew a licence. A professional lawyer services is required at that moment.



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