Turnover rents for commercial landlords and tenants
The economic shock experienced by commercial landlords and tenants during the COVID-19 pandemic has seen the resurgence of turnover rent leases.Read more
Heads of terms are the headline terms that reflect the deal reached between the landlord and tenant so that the lease can be prepared. The heads of terms are usually prepared by an agent acting on behalf of the landlord and will be specific to each lease and property.
Whether you are a tenant entering into a lease or a landlord granting a lease, agreeing heads of terms helps to prevent any future misunderstanding and lengthy negotiations about what the lease will contain.
In addition to agreeing the main terms, such as the headline rent or the contractual term, many other points will need to be considered and agreed before the documents can be drafted. These include, but are not limited to:
Heads of terms also often refer to other important clauses in the lease, such as insurance provisions and obligations in relation to any relevant service charges amongst others.
Heads of terms can contain varying levels of information and will generally depend on the size of the property transaction and the parties involved. If drawn up by an agent, they will usually be more detailed.
It is important to remember that heads of terms are not legally binding. They are used to show the intent of the parties. Landlords and tenants can still change their mind, negotiate the terms, or withdraw from the transaction after entering into these. As previously mentioned, however, agreeing and providing detailed heads of terms at the outset is likely to lead to a smoother transaction for all parties involved.
If you are about to enter into a commercial lease and would like further information or advice on heads of terms, please call us on 0121 716 8042 or complete the form below.
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