Even though new commercial lease legislation came into effect in 2003, it is often overlooked by many property owners, reports John Russell, head of property management at Januarys. 

The legislation requires tenants of commercial property to register interests in land in England and Wales if a new lease, for a longer period than 7 years, is entered into.

You will need to register the lease formally with the Land Registry office. The period of lease which only applied to leases of 21 years and over has been lowered drastically to 7 years and applies to new or existing leases, either assigned or sublet. Future proposals aim to reduce the period even more, possibly down to 3 years.

Russell says, “Even though this legislation has been in place for 3 years now, I often come across landlords and tenants who are unaware of the situation or ignore until the last minute and suddenly find they have to carry out exhaustive, expensive work to comply. It comes as a bit of a shock to say the least! The secret is to forward plan so that you don’t get caught out when your solicitor asks for a plan of the property when he is preparing a new lease.”

So what are the requirements and implications? The Land Registry office requires the landlord or tenant to provide an accurate, detailed plan of the premises. If this is not produced correctly it can have adverse effects with the plans being rejected thus delaying the registration. It is also important to remember that plans must conform to the Land Registry’s stipulations and must include details contained in the lease regarding demise, rights of way and other easements. Often the preparation of such plans can also bring attention to details that may have been otherwise overlooked in the generation of the new lease. Either way it is important to carry out this aspect of your lease correctly and in good time for your lease renewal.

BACK TO LIST