Leases - New Code of Practice

A new code of practice for commercial leases has been released following a long consultation exercise involving landlords and other interested parties.

The code makes a number of changes to the substance and detail of current practice. These include:

• a simplified approach to the exercising of break clauses by tenants;
• sub-letting of the whole premises to be normally completed without the requirement for financial guarantees by the existing tenant;
• a more flexible approach to rent reviews, rather than just ‘upward only’ reviews;
• the requirement for landlords to provide best estimates of service charges; and
• the requirement that tenants’ repairing obligations should be appropriate considering the terms of the lease.

The Code for Leasing Business Premises in England and Wales 2007.