Renfrewshire Council

Guide to Renfrewshire Council's standard lease

This is a brief guide to Renfrewshire Council's standard full repairing and insuring lease.

Under this lease, you (the tenant) must pay the full costs of maintaining and repairing the premises and a share of Renfrewshire Council's block insurance policy.

Renfrewshire Council use this lease when they let their commercial retail property.

This guide highlights the clauses the Asset Management Team believe are the most relevant and will hopefully help you understand the basis of your proposed tenancy.

However, this is not a full guide. Before you sign the commercial lease, you should get your own independent legal advice on what your responsibilities will be as a commercial tenant.

The lease
Clause 1 contains the names of everybody involved in the lease, a brief description of the premises (with a plan attached), the length of the lease, the initial rent, the dates Renfrewshire Council will review the rent (if this applies) and what you will be allowed to use the premises for.

Clauses 4 and 5 confirm the date you have to pay the rent on and say that you cannot stop paying rent if you believe Renfrewshire Council owe you compensation. They also confirm that you are responsible for all outgoings, rates, taxes, assessments and charges.

Clause 5.4 says you accept that at the beginning of the lease the premises are in good condition and fit for the purposes they have been let for. Also, you will keep the premises in good repair throughout the length of the lease.

Under this clause you are fully responsible for meeting the cost of repairs (except those covered by insured risks in Renfrewshire Council's block insurance policy).

This is why the lease is called 'full repairing'. You must pay in full the cost of all repairs, both internal and external. For stand-alone shop units (shop units not attached to any other property), you will have to pay for and have carried out all maintenance and repairs to the unit. For units in our tenement properties (houses above) Renfrewshire Council will arrange for repairs to be done that affect the common areas of the tenement property, for example, the roof or the guttering. Renfrewshire Council will then ask each tenant in each unit to pay for part of the cost of the maintenance or repair for the common areas.

Alienation clause 5.8.1 to 5.8.4 confirms that you can only sub-let or transfer the interest in the lease of the whole property to another person, with Renfrewshire Council's permission. Renfrewshire Council will not unreasonably refuse permission. You cannot sublet or transfer part of the premises in any circumstances.

If you do sublet or transfer the whole property, Renfrewshire Council have the right to review the rent for the lease. But this will only take place if the new tenant wants to change the use of the property to one which Renfrewshire Council believe is of a higher value than the previous use, for example, Class I retail to Class III hot-food use.

Use clause 5.9.1 to 5.9.8 confirms that you can only use the premises for the purpose set out in the planning legislation and the terms of the lease. Also, you must not cause a nuisance to neighbours or neighbouring property, or use the premises for an illegal purpose. You must make sure that you check all planning legislation. You may also want to confirm the planning position in writing with Renfrewshire Council's Planning and Transport Department.

Landlord's costs clause 5.10 confirms that you must meet Renfrewshire Council's reasonable costs, fees, charges and expenses at the start of the lease and if Renfrewshire Council grant permission under the lease for any reason. You will also be responsible for any costs connected to preparing and carrying out a schedule of repairs under the terms of the lease. Renfrewshire Council can also ask you to pay a management and administration fee of 5% of the passing rent due in the terms of the lease.

Clause 7 - Insurance

Renfrewshire Council have a block insurance policy in place for their commercial, industrial and retail properties. This policy relates to the shell of the property, that is, the walls, floor (not including floor coverings) and ceiling. The cover relates to the loss or damage by fire, explosion, storm, lightning, flood, burst pipes, riot, civil commotion, or being hit by aircraft and items dropped from them during peacetime. This policy has an excess of £100,000 and each tenant is expected to meet the first £250 of any valid claim. The Council currently do not charge for this cover, but reserves the right to do so. The tenants should procure their own contents, public liability, plate glass, loss of profits and or theft insurance.

Clause 8 - Irritancy (ending the lease early)
If you do not keep to the terms of the lease, Renfrewshire Council can end the lease by giving you an appropriate notice. The notice will tell you how Renfrewshire Council believe you have broken the terms of the lease. It will also give you the date Renfrewshire Council will end the lease if you do not put the problem right.

VAT
At the moment Renfrewshire Council do not charge VAT on their rent, but may decide to do so in the future. We will write to you if we decide to do this.

Rent review
Depending on the length of lease, the lease may allow Renfrewshire Council to review the rent at set intervals mentioned in the terms of the lease. Renfrewshire Council normally review the rent every three years to take account of the open-market value of the premises.

If you are not happy with the rent review, you can appeal against the new figure.

Conclusion
Although Renfrewshire Council are prepared to negotiate the terms of their full repairing and insuring lease, this lease is meant to make sure that all tenants have a similar lease, and that all of Renfrewshire Council's commercial tenants occupy and lease property in an equal and fair way reflecting the modern commercial market.

Renfrewshire Council hope you find the guide to their standard full repairing and insuring lease helpful. However, this is not a full guide. Before you sign the commercial lease, you should get your own independent legal advice on what your responsibilities will be as a commercial tenant.

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