Shop lease agreement

About this shop lease

This lease should be used to let a shop or retail unit that does not share services or facilities with neighbouring units owned by the same landlord. The shop itself may be part of a parade of other shops owned by other landlords, or it may be stand-alone. Of importance is that the landlord does not need to recover service charges from the tenant.

The tenant could use the shop for any purpose including:

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

The shop may or may not have additional space used by the tenant for other business purposes, such as offices or storage. This lease does not cover additional space used for residential use by the tenant, although Net Lawman does provide one that does (see below).

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

Similar commercial lease agreements

• If a restaurant, cafe or fast food outlet will be operated from the property, use Restaurant lease agreement. This lease contains specific clauses for commercial kitchens and food retail.
• If the shop being let is part of a parade owned by the same landlord, or uses shared facilities and services, use Business lease: shop in parade.  This agreement contains service charge recovery provisions.
• If the tenant will also live at the property, use Mixed use lease: shop in parade with residential space.
• If the property will be used as an office (rather than a shop), Office lease agreement may be more appropriate.

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 template can be summarised as:

• term of 5 years or under (often called a short term lease)
• standard guarantor
• 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 without making it difficult to edit.

The law in this shoplease

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 shop lease is comprehensive, providing alternative choices for important decisions.

The contents include 24 provisions and 2 schedules covering:

• rent: period, amount, other payments, interest on overdue rent, periodic review
• condition and repair
• tenant's positive obligations
• 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: rights reserved
• Schedule 2: draft agreement for a security deposit