The 8 Key Steps In A Commercial Lease Process All Businesses Should Know

• Published date: 30 July 2021
• Subject Matter: Government, Public Sector, Real Estate and Construction, Money Laundering, Real Estate, Landlord & Tenant - Leases
• Law Firm: PDT Solicitors
• Author: Mr Craig Burton, Chehraz Fox and Oliver Parsons

Leasing commercial property is one of the most important commitments for a business owner, so getting it right is essential.

The steps involved in entering into a lease can be intricate and confusing. Here is a step-by-step commercial lease process chart that will held guide you through the key stages of the process.

You can download the full guide here

The 8 Key Steps

1. Negotiation & Agreement on Heads of Terms

Where a property is marketed by commercial agents, the agents will be engaged not only to facilitate inspections and field questions on the property generally, but also to seek to agree the key points for inclusion in the lease (commonly referred to as the "heads of terms"). Whilst the heads of terms will form the basis on which any lease documentation is ultimately prepared, it should be noted these are non-legally binding, and therefore better viewed as a statement of the intention of the parties rather than any form of contractual commitment.

For more information on the points covered under heads of terms please see our top tips for negotiating head of terms guide.

2. Solicitors Instructed

Once the heads of terms are agreed the agent will circulate these to both parties and their solicitors which then essentially acts as the green light for the legal process to begin.

In terms of timings generally, and whilst every transaction is different, from the issue of heads of terms to completion of the lease generally takes between 4-6 weeks.

3. AML and Client Care Details

Once solicitors are instructed, in line with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the Money Laundering Regulations 2017) the solicitors will then need to undertake certain anti-money laundering checks (including verification of identity). At this stage it is important to note that the solicitor will not be able to progress matters without holding the required ID and having undertaken the associated checks and it is important therefore that clients are aware of this requirement and are able to provide the information required promptly.

At PDT, to assist with the current climate and as a firm embracing advancements in technology, we are pleased to confirm all new client ID requirements are dealt with on a third-party platform called "Onboard" whereby clients can simply upload copies of their documents without the need to be present at the firm's offices.

In addition to AML requirements, the client should also...