| Word(s) |
Meaning |
| agents
fees |
if
you are selling or renting out a commercial property using
an agency you will be responsible for payment of their fees.
Fees are commonly 10% of the annual rental achieved (in the
case of a letting) and between 0.5 and 2% in the case of a
freehold sale. If you are seeking commercial you might also
employ an agency. They will locate suitable premises, advise
you generally and deal with negotiations on your behalf. In
this case you the buyer (or tenant) would pay agency fees on
a similar percentage basis |
| agreement
for lease |
a
preliminary (and simplified) legal document that commits a
landlord and a tenant to entering into a lease on agreed
terms at a future date (which is usually contained in the
document). Often used in the case of new buildings that have
not yet been constructed. |
| alienation |
the
subject of how a tenant is allowed to dispose of a property
held on a lease. The alienation clause will detail whether a
tenant may sub-let part or all of a property and if they can
assign the lease to another party. |
| arbitration |
they
way in which many lease disputes are decided. A third party
(usually an arbitrator or surveyor with arbitration
qualifications) will consider the written or verbal
submissions of both landlord and tenant and award a decision
binding to both the parties. |
| assignee |
a
new tenant who has agreed to have an existing lease
transferred to him by its current holder (assignor) |
| assignment |
the
act of transferring a lease from one tenant to another |
| assignor |
the
holder of a lease who has agreed to transfer it to another
tenant (the assignee) |
| bank
guarantee |
an
extra financial security against non-payment of rent and
other property charges often put forwards by new businesses
when acquiring commercial properties for the first time |
| bonded
or serviced storage |
warehousing
where your storage is managed by a third party in their
building. Often quite expensive but very flexible |
| break
clause |
a
clause built in to a lease permitting either the landlord or
tenant (or both) to terminate the lease on a certain date
usually by giving written notice in advance |
| buildings
insurance |
a
policy which cover the landlord against damage, destruction
and loss of rental on the building. The tenant is normally
responsible for reimbursing the cost to the landlord |
| business
rates |
taxes
charged by local authorities to cover the cost of providing
local services |
| costs
and outgoings |
the
total expenditure for a property that a tenant is obliged to
pay incuding elements such as rental, local taxes, service
charges, insurances, annual repair budgets, managing agents
fees, one-off charges |
| covenant |
has
two relevant meanings. 1. any term or clause contained in a
lease which the landlord and tenant are binded to. 2. The
financial standing of the tenant. For example "the
property was let to a tenant with good covenant
(strength)." |
| dilapidations |
repairs
to the property that have not been attended to by a tenant
in accordance with the provisions of the lease. |
| estate
charges |
often
levied when the property is located on an estate rather than
as an individual unit. Estate charges cover things like
on-site security, estate roads maintenance, lighting,
rubbish collection, landscaping, cleaning, communal water,
etc. |
| exclusive
possession |
when
an occupier has 100% occupation of the whole of the
property. No rooms, kitchens, toilets are shared with any
other party. |
| fixtures
and fittings |
can
be defined as landlord's or tenant's fixtures and fittings.
Landlord's F & F are usually not structural/non material
parts of the property which are present at the start of the
tenancy I.e. office partitions, fitted kitchette, air
conditioning units, carpets. Tenant's F & F are things
that the tenants may have added at their cost. It is
recommended that the tenant has a list and proof of its own
fixtures and fittings and obtains permission to add them to
the property if required to do so under the lease |
| freeholder |
the
ultimate owner of the property (not necessarily the landlord
who may in fact have a lease from the freeholder) |
| General
Development Order |
an
act of parliament which relaxes certain planning
restrictions of smaller commercial properties. One benefit
being that certain industrial buildings can convert larger
amounts of their floorspace over to office purposes without
the need for applying for planning permission |
| gross
external square footage (metreage) |
the
way in which factories and warehouses used to be measured
for comparison and marketing purposes. It involved taking
measurement OUTSIDE the external walls |
| gross
internal square footage (metreage) |
the
generally accepted way of measing factories and warehouses
by combining measurement taken between the INTERNAL faces of
the walls. |
| holding
over (following lease expiry) |
if
a lease has expired by the tenant is still in occupation of
the property, this is called "holding over". He
may be protected from eviction by the Landlord and Tenant
Act 1954 and/or negotiating the terms of a new tenancy |
| independent
expert |
a
third party often called on to determine lease disputes,
especially rent reviews |
| intermediary
landlord |
sometimes
a party can be both landlord and tenant. For instance they
may have a lease by then "sub-let" to another
tenant. This party is an intemediary landlord. |
| landlord |
a
party with a beneficial interest in a property to whom a
tenant pays rent |
| landlords
fixtures |
Landlord's
F & F are usually not structural/non material parts of
the property which are present at the start of the tenancy
I.e. office partitions, fitted kitchette, air conditioning
units, carpets |
| lease |
a
legally binding contract between a landlord and a tenant
which sets out the basis on which the tenant is permitted to
rent a property. |
| lease
renewal |
the
negotiated process of granting a new lease, between a
landlord and tenant following expiry of a lease or tenancy
assuming both the landlord and tenant following the expiry
of an old lease |
| legal
costs |
the
costs incurred by both landlords and tenants solicitors
usually in connection with the granting of a new lease.
Often includes |
| licence |
several
meaning. 1. a simplified Lease often for a short period. 2.
a legal agreement supplemental to a lease. |
| licence
to alter |
a
legal document setting out agreement which permits the
tenant to make alterations to the landlords property |
| light
Industrial |
and
industrial uses that is considered fairly compatable with
residential properties being located close by |
| listed
buildings |
Often
buildings of historical interest that are protected from
redevelopment and in many cases external and internal
alteration. |
| mezzanine |
a
floor constructed between main structural floor. Often built
within warehouses as an additional storage platform. |
| net
internal square footage (metreage) |
the
method by which conventional office buildings are measured.
It takes into account only useable floor space and excludes
stairways, lobbies, thickness of walls, etc. |
| option
to determine |
a
clause in a lease that allows either a landlord or tenant or
both to end a lease prior to its expiry date. |
| periodic
tenancy |
Often
an "unwritten" tenancy that has come into being
after an informal rental of a property has taken place for a
period of time |
| planning
permission |
permission
that must be obtained from a local authority prior to
commencing development of land or property. Also covers what
a property can be used for. |
| quiet
enjoyment |
a
landlord's lease obligation allowing the tenant occupation
and benefit of the property without hinderance on the part
of the landlord. |
| rate
in the £ |
the
National rate that is applied to each £1 in a property's
rateable value. This is the multiplier which calculates each
individual business rates bill. |
| rateable
value |
a
notional value placed on a property by the Government's
Valuation Office. This allows the local authorities to
calculate the correct level of business rates to charge to
the property occupier to cover local services |
| reinstatement |
if
a tenant alters the property he will often be obliged to
reinstate it to its former state at the landlord's request
generally at the end of the lease |
| rent
free period |
an
period (usually at the commencement of a tenancy) where a
tenant does not have to pay rent. Often agreed either as an
inducement or in lieu of the tenant carrying our some agreed
works to the building |
| rent
review |
the
periodic procedure of reviewing the rental under a lease. By
negotiation between landlord and tenant. In the absence of
agreement it is often decided by an Arbitrator or
Independent Expert the additional cost of whom is shared or
apportioned between the parties. |
| rental
deposit |
a
bond paid by a tenant to a landlord against non payment of
rental and/or other outgoings. Often held in a separate
account and returned after an agreed period of time. |
| rental
payment (frequency thereof) |
under
lease, traditionally quarterly (December, March, June,
September). Usually tenants rental pay in advance |
| repairing
obligations |
The
responsibilities in a lease of both the landlord and tenant
governing repairs |
| retaining
(an agent) |
to
instruct an agency to find a commercial property and to
handle its negotiations and acquisition on your behalf. |
| Royal
Institution of Chartered Surveyors |
The
professional body of Chartered Surveying - The property
profession. |
| schedule
of condition |
an
agreed record of the state of a property at the commencement
of a tenancy. |
| schedule
of dilapidations |
a
list of repairs that a landlord considers that the tenant is
obliged to carry out in accordance with the terms of a full
repairing lease. Often served at the end of a lease. |
| serviced
offices |
offices
often in small suites or individual rooms where the tenants
al share facilities and equipment I.e. telephone answering,
fax machines, photocopying, meeting rooms. |
| stepped
rental |
an
agreed basis of paying rental usually at the start of a
tenancy whereby the rental increases gradually over a period
of weeks, months or years |
| sub-letting |
the
act of granting a sublease |
| sub-tenancy |
a
lease granted by an existing leaseholder |
| subject
to contract |
a
condition of an offer which can later be made binding by
agreement, memorandum, licence or lease |
| suis
generis |
a
particular use of a property which does not fall directly
into any single group in the Town and Country Planning (Use
Classes) Order 1987. |
| survey |
an
inspection and report on a building's structure and
condition |
| tenancy |
the
basis on which a property is being rented (not necessarily a
lease) |
| tenancy
at will |
a
simplified agreement that allows a tenant to occupy a
property on a very temporary basis - capable of being
revoked without an notice |
| tenant's
fixtures |
Tenant's
F & F are things that the tenants may have added at
their cost. It is recommended that the tenant has a list and
proof of its own fixtures and fittings and obtains
permission to add them to the property if required to do so
under the lease |
| Town
& Country Planning (Use Classes) Order |
The
act of parliament which sets out all the alternative uses
for commercial and industrial properties and groups them
accordingly |
| unitary
development plan |
plans
drawn up by local councils which set out which parts of
their area are identified as being capable for development
and in what ways development plans might be allowed |
| user
clause |
a
clause in a lease which sets out what the tenant is
permitted to use the property for |
