There are two different types of commercial property rental agreements. You can rent a commercial property by obtaining a lease or entering into a Licence (Please refer to the ‘Licence’ section)
A lease usually is entered into for a fixed period of time. The duration of a lease varies, but was typically 15 or 25 years. However, recent research undertaken by MOVEHUT suggests that the average length of a business lease has significantly changed and is today around eight years. The main advantage of a long lease is to offer you long-term stability.
A break clause gives both you and the landlord an option to give notice during the fixed term of tenancy. This can be inserted into the lease when initially drafted and can be very effective. There can be single or multiple break clauses at pre-determined times. There are usually set terms of how and when these clauses can be executed. Usually a period of notice prior to executing the break is required, typically three to six months. There may be a penalty for exercising a break, which you will have negotiated through your agent. The precise notices and dates for executing a break must be adhered to correctly in order for the break to be effective and legal.
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