Long lease of part: commercial unit in mixed-use building (simple service charge)

by Practical Law Property

A standard document for a long lease of a ground floor commercial unit, such as a shop or office in a high street location, within a small mixed-use building in England and Wales. This standard document is designed for transactions where a premium is paid on grant for a headlease with a peppercorn ground rent and no rent review. It assumes the upper floors of the building consist of one or more flats let on long residential leases. A key feature is its simple service charge mechanism, where the landlord charges the tenant for its proportion of service costs on an ad hoc basis as they are incurred, rather than through on-account payments. This standard document is drafted to be substantially consistent with the building's residential leases and includes a mechanism for the commercial tenant to request the landlord to enforce specific covenants against the flat tenants. It addresses alienation, provisions for reinstating insured damage and includes the prescribed clauses for Land Registry purposes. This standard document can also be used whether or not the lease is contracted out of the security of tenure provisions of the Landlord and Tenant Act 1954 (LTA 1954).