Is A Solicitor Required For A Commercial Lease Transaction?

Using a solicitor for your commercial property lease sale or/and purchase is not a legal necessity, but it is highly recommended. Commercial property law can be complicated, and the financial risks can be high, e.g. placing your business at danger or tying you into a fixed lease.

Legal Advice When Leasing A Commercial Property

It is not important to get legal advice when leasing a commercial property, but it is highly recommended, especially given the high financial stakes and long periods of commitment that are involved with commercial property transactions.

When leasing the right commercial property, ensure you have ran all essential checks, surveys and investigated title to the property, as well as checking the physical status of the property and the surrounding land on which it is situated.

You will also need to choose what is best for you in terms of purchasing the freehold, or just obtaining the lease. A solicitor, mutually with your accountant (if applicable), can assist you in analysing your business plans and determine which is best tailored to your long-standing requirements.

Do You Need To Have Your Commercial Lease Checked?

There is no legal need to have your lease reviewed by a solicitor. However, we do recommended gaining legal advice on a commercial lease.

There are many different circumstances and matters covered in a lease term. A solicitor’s legal advice can assist in ensuring you fully understand these conditions, as well as their implications in practice.

By having a solicitor review your lease, you will be able to pin-point problems earlier and can solve these before commencing the lease. For instance, the lease may not clearly explain the service charge payable by you, or it may be an illegal contribution towards the service charge due to there being other tenants in the building who also have a commercial lease with the landowner..

Which Legal Documents and Processes You will Need for a Commercial Property Transaction?

There are three primary documents you need to be aware of when involved in a commercial property transaction: Heads of Terms, Contract and the Transfer.

  • 1 . First Document – Heads Of Terms

The first document you will likely have when purchasing or taking a lease for a commercial property is the heads of terms. This will set the basic terms of the transaction, name the nature of the transaction, the price and the parties.

  • Second Document – Contract

The contract will incorporate standard commercial property conditions. Once the contract has been exchanged, both the parties are legally bound to complete the property transaction.

  • Third Document – Transfer

The third and final document required is the Transfer. If you are buying the entire commercial property, you will need a TR1 (Registered title(s): whole transfer). This deed permits you to effect the transfer of the ownership. If the transaction only concerns a part of the property, a TP1 is used.

If you are buying a freehold commercial property, you will also need to send the seller a Form TA13. This document contains pre-completion questions such as the bank account information which the money should be sent to and where keys can be collected.

Some other documents may also be required. For example, just after completion, send a Form MRO1 (Maintenance, Repair, and Operating Supplies) and a verified copy of the mortgage, to register your new mortgage with Companies House within 21 days after the making of charge. Companies House will send a certificate of registration.

You must send your SDLT (Stamp Duty Land Tax) return to HMRC (HM Revenue & Customs) with your SDLT payment, within 30 days of completion.

You can then send the certificate of registration, mortgage document, SDLT5, verified copies of the transfer and your Form AP1 to the Land Registry to record your transaction. This should be done within 30 working days from the search outcomes of your OS1 (Official Search).

Which Regulations And Legislations Apply To Commercial Property Transactions In The UK?

There is a wide range of legislation which applies to commercial property transactions.


  • The Landlord and Tenant Act 1954 – security of tenure
  • The Law of property Act 1925 – requires conveyance to be done by using a deed
  • Land Registration Act 2002 – ensure that ownership of land in England and Wales takes the form of ‘title by registration’, rather than ‘registration title’
  • Land Charges Act 1972 – regulates the registration of charges on unregistered land

Negotiating The Price Of Commercial Property

When you are negotiating the price of a commercial property, it’s essential to take a holistic approach when valuing the property. This will mean taking consideration to all the outcomes from any property searches, the results of your survey, the commercial property seller’s enquiries and other searches conducted. Any problems raised from these searches can be used to bring down the buying price because they generally decrease the value of the property.

Having an experienced solicitor in a commercial property transaction, that is capable of considering all the relevant elements, can go a long way in assisting you when negotiating a better price.

If you want to know more please contact Direct Solicitors on 08000 250 250 for a free initial consultation to discuss your needs or fill in your details in our online form we will get back to you soon.