Tenants - Don’t sign off on Heads of Terms without a chat with your Solicitor…. Why?
Well, you may agree something which then forms part of the lease and that you’re stuck with! For example, on repair, you may accept an FRI. In practical terms, this means you keep the premises in good repair and repay the landlord for insuring the property. You may think ‘well the building is not too bad so I can live with that obligation’. What you may not realise is that if the building is not in tip top condition that at any time, but usually at the end of the term, the Landlord can serve what’s called a schedule of dilapidation. Usually the landlord surveyor will take every aspect of the building, conduits, landlord fixtures into account. So you may be ready to move on from the building but it comes back to bite you costing potentially tens of thousands of pounds to bring up to a high quality repair. Avoid this by agreeing a schedule of condition so that you are not obliged to hand the building over in any better condition than you took it.
So - either obtain legal advice on negotiating the terms right from the beginning or at the very least make sure your solicitor discusses all the implications of your negotiations before the final Heads are signed off.
Adam Mayer
Principal Solicitor, Commercial Property
