Underlease of part: office

by Practical Law Property

A standard document for use as an underlease of part of an office building in England and Wales. This standard document is for an internal-only demise of one or more office floors, with optional wording for a separate storage area. It can function as a full repairing and insuring (FRI) lease, or alternatively, the tenant's repair obligation can be qualified by a schedule of condition. This standard document assumes the superior landlord insures the building, requiring the tenant to pay a proportion of the insurance rent payable under the superior lease. The landlord retains responsibility for the building's retained parts, recovering costs through a detailed service charge, which includes an optional provision for a service charge cap reviewable in line with the Retail Prices Index (RPI). This standard document also offers flexible rent review options, including an upwards only open market review with an optional cap and collar, or a review based on an agreed proportion of the rent payable under the superior lease. Key optional provisions are included to address uninsured risks, a break clause, and wording to adapt it for a renewal lease. It contains prescribed clauses for registration and provisions for a tenant's guarantor, providing a robust framework for office underlettings .