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Drawing up agreements

This area of the site gives you a brief overview of drawing up a written agreement and how to do this whilst following best practice, ensuring a balanced agreement for both landlord and tenant.

  • drawing up an agreement
  • code of practice

The process of drawing up an agreement

Once you or your surveyor has negotiated the terms of the agreement with the prospective tenant, the key points agreed are recorded in a document called the ‘Heads of Terms’. This short document - often just a side or two of A4 - is used to instruct the solicitors for each party who draw up the agreement. If the landlord has a previous agreement for the premises then the solicitor may use this as a template and insert the new terms agreed. If there is no precedent agreement, then the solicitor may use a standard lease or licence template (for example, those produced by the Practical Law Company). The agreement is then reviewed and agreed by the tenant’s solicitor before it is signed by both parties.

Code of practice

A revised code of practice has been launched to help promote fairness between landlords and tenants in commercial leases and is the result of pan-industry discussion between representatives of landlords, tenants and Government. The Code for Leasing Business Premises in England and Wales 2007 is voluntary, but the Government is taking a keen interest in ensuring the property industry complies with this Code. You can download the code (which is separated into two sections for landlords and tenants) by following this link. The Code also includes a useful model Heads of Terms setting out a detailed list of the main points that should be included in a commercial lease.

It is essential that your agreement is drafted well to ensure that your position as a landlord is protected. You should ensure that the solicitor you instruct has commercial property experience as this is a specialist area of law. For advice on how to choose and instruct a solicitor follow this link to our section on Using Property Professionals.