Mixed use lease

About this agreement

This mixed use lease should be used to let a commercial property that also includes residential space that will be used by the same tenant. The most common example would be a shop with a flat above.

The tenant could use the commercial space for any purpose including:

• conventional retail of goods
• restaurant or cafe
• provision of services such as PC repair or estate agency

The shop may or may not have additional rooms used by the tenant for other business purposes, such as offices or storage.

The mixed use lease provides for the residential space to be part of the business letting. The agreement includes an extensive menu of tenants' covenants to protect every aspect of the landlord’s interest.

Paragraphs relating to a full recovery of a service charge allow this lease to be used for a shop that forms part of a parade owned by the same landlord and that shares common services with other units in the parade. However, the document could be amended to remove these clauses if the property is not neighboured by others belonging to the same landlord.

The document has been drawn to help protect the landlord's interests as greatly as possible.

Similar commercial lease agreements

We offer two similar leases for shops where the tenant does not live at the property as well.

• Use Shop lease agreement if the shop does not share services or facilities with other neighbouring shops owned by the same landlord
• Alternatively, use Business lease: shop in parade if you require a provision for service charge recovery.

Key features

Plain English is used throughout except where it is necessary to use legal terms common in this field of law.

The key features of this lease template can be summarised as:

• term of 5 years or under (often called a short term lease)
• standard guarantor
• tenant also lives at the property
• options for transfer or assignment to another party
• sub-letting forbidden
• option to include a break clause for premature termination by the tenant
• a choice of options for rent reviews

This document has been drawn so as to make it applicable to the vast majority of leasing scenarios for mixed retail/residential use without making it difficult to edit.

The law relating to this lease

This lease is regulated primarily by:

• the Landlord and Tenant Acts 1860-2005;
• in particular the Landlord and Tenant (Amendment) Act 1980; and
• the Landlord and Tenant (Amendment) Act 1994

In balancing the codes with the law and the interest of the Landlord, we have followed the codes where reasonable, but have preferred the interest of the Landlord where there may be a difference.

Document contents

This lease agreement is comprehensive, providing alternative choices for important decisions. The contents include 27 provisions and 3 schedules covering:

• rent: period, amount, other payments, interest on overdue rent, periodic review
• condition and repair
• tenant's positive obligations
• tenant's obligations for residential space
• service charge recovery
• restrictions on tenant: prohibited activities on the property
• signs and advertisements
• assignment of the lease
• indemnities by the tenant
• security deposit
• insurance
• access for landlord
• guarantor
• termination: default notice by landlord; provision for premature termination (a break clause)
• forfeiture
• Schedule 1: the service charge
• Schedule 2: rights reserved
• Schedule 3: draft agreement for a security deposit