These obligations may either be by direct responsibility, for example to repair the property, or to be responsible for a proportion of the cost of doing so through a service charge. It is usually a proportion because other tenants will also be contributing and normally the landlord will be expecting to recover 100% of his outlay through the service charge.

These obligations may increase the cost of occupation of the property considerably - particularly in relation to a shorter term lease.

Largely because of weak market conditions, landlords are now far more flexible in the provisions they will agree to. The length of the term (that is to say how long the lease will last) is much more negotiable than it was and in consequence the average length of lease terms is coming down quite significantly.

Alternatively the landlord may agree to the tenant having the right to end the lease early, usually called a break clause or break option.

When the main terms of the deal are agreed, the landlord’s agent will set these down in Heads of Terms or a Memorandum of Letting and issue those to the parties’ advisers.

We often find that by the time the lawyers are instructed by the tenant he has already agreed Heads of Terms with the landlord’s agent and usually without the advice of a commercial agent on his behalf.

Do remember the 'letting agent' is acting on behalf of the landlord. If the tenant seeks advice from a commercial agent he will be advised as to current market conditions and, for example, whether the proposed rent is appropriate.

The tenant should also appoint a solicitor and seek his advice before the Heads of Terms are agreed. It is extremely difficult to renegotiate terms set out in the Heads of Terms once they have been agreed and is likely to slow down the process of agreeing the detailed provisions of the lease with the landlord’s solicitor.

For example, on a shorter term letting or where the building is showing its age it may not be appropriate for the tenant to take full responsibility for repairing the building or the cost of doing so.

If this is not specifically negotiated with the agent, in all likelihood, the heads of terms will be issued on a ‘full repairing’ basis. Usually full repairing will result in the tenant in having to put the building in good repair at the start of the lease even though the clause in the lease does not appear to actually say so.

It is worth mentioning that the Heads of Terms will usually deal only with the principal provisions of the lease – its length, the property to be let, the rent, outgoings, repairs, cost of insurance, permitted use and whether you can pass the lease onto another tenant. When the actual lease comes through you will usually find that it contains many other obligations and restrictions - some of which may themselves be quite onerous.

For more information contact Malcolm Poynter on 01635 521212 or malcolm.poynter@clmlaw.co.uk