Commercial Property Glossary
The mechanism whereby a tenant can sell on the tenants interest to another and which requires the landlords consent by license
A provision in the lease allowing for the term to be shortened but usually subject to strict compliance conditions
Common hold is a new form of freehold land ownership introduced by the Common hold and Leasehold Act 2002. Common hold is designed to be suitable for residential, mixed use, a variety of residential and commercial use and commercial developments as an alternative to long leasehold ownership.
The binding commitment by seller / buyer, landlord / tenant to proceed with the agreed transaction
The assessment of the tenants liabilities under repairing covenants in a lease, normally established at the end of a lease
Refers to detailed searches of historical land use to establish e.g. contamination on or near the site
An agreement to confirm the exact extent of any personal or other guarantees to perform certain responsibilities
Heads of Terms
The principle points of agreement normally entered into between the letting / tenant to be embodied in a formal contract/selling agent and the proposed buyer
The formal legal title to a specific property limited to a specific time duration
Limited Liability Companies, Limited Liability Partnerships, Partnerships or sole ownership or trust or pension arrangements
The formal consent given by e.g. a landlord to a request by a tenant to assign or to carry out fit out works
License for Alterations
A formal consent by the landlord to allow the tenant to carry out works and which may serve to exclude the extent and value of the works from rent review assessments
the process of taking a case to a law court for a judgment to be made which both parties must abide by.
A guarantee for a private individual to accept and honour another’s obligation; for example, an individual company director accepting responsibility to meet the financial obligations of the company in its capacity as tenant under a lease
Refers to the Town and Country Planning legislation controlling the issue of permissions for development and use of buildings
Additional security sometimes requested by a landlord of for example 6 months' rent to be held for a duration
Stamp Duty Land Tax
Stamp Duty land tax was introduced on 1 December 2003. Stamp duty Land Tax is payable on all property transactions in excess of £120,000 for residential property and £150,000 for non residential or mixed transactions. Depending on the term and the rent, payable under the lease, stamp duty land tax is payable by tenants within 30 days of the completion date. The calculation for the tax is based upon the net present value of the rent. All leases granted for a term of 7 years or more are notifiable transactions unless there is no rent or monetary value or premium payable.
The creation of a subsidiary rental term under the principal lease, e.g. a lease for 10 years could accommodate a sublet of the whole or part for e.g. 9 years
Town and Country Planning Order
On 1 April 2005, the Use Classes Amendment Order came into force to reflect changes in retail trends. The changes only apply to the use of premises in England at the moment. Additional planning consent will now be required to change the use of a restaurant to a pub or takeaway.
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