Free Commercial Lease Agreement Template

DEMISED PREMISES

The Landlord lets to the Tenant the premises known as Unit 3, Granary Wharf Business Park, Leeds LS1 4BR (Ground floor office suite, approx. 850 sq ft, including shared reception and WC facilities) (the "Premises") for use as office use within Class E(g)(i) of the Town and Country Planning (Use Classes) Order 1987 (as amended) only. The letting is intended to create a tenancy within the meaning of Street v Mountford [1985] AC 809 and not a licence, the Tenant being granted exclusive possession of the Premises for the term at a rent. The Premises have an Energy Performance Certificate (EPC) rating of B. The Landlord confirms compliance with the Minimum Energy Efficiency Standards under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962), under which commercial premises may not be let where the EPC rating is below E since 1 April 2023 (subject to exemptions registered on the PRS Exemptions Register). The parties acknowledge that the UK Government has consulted on raising the minimum non-domestic MEES standard to EPC C from 1 April 2028, and the Landlord undertakes to keep the EPC rating under review and to engage with the Tenant on any improvement works that may be required to maintain compliance.

TERM AND SECURITY OF TENURE

The term of this Lease commences on 2026-06-01 and expires on 2031-05-31 (the "Term"). This Lease is granted with the benefit of the security of tenure provisions of Part II of the Landlord and Tenant Act 1954, subject to the statutory grounds of opposition under section 30 of that Act. Where the Term exceeds seven years the Tenant shall apply to register the Lease at HM Land Registry within the priority period, in accordance with section 27(2)(b)(i) of the Land Registration Act 2002.

RENT

The Tenant shall pay to the Landlord an annual rent of GBP 18,000.00, payable quarterly in advance on the usual quarter days (25 March, 24 June, 29 September and 25 December) by bank transfer. A rent-free period of 2 months applies from the commencement of the Term, during which no rent is payable. A rent deposit of GBP 9,000.00 is payable on execution of this Lease, to be held on the terms of a separate Rent Deposit Deed and applied to remedy any breach of the Tenant's covenants. Default interest at 4% per annum above the Bank of England base rate is payable on rent arrears, such rate being reasonable and proportionate within the principle in Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67 and so not a penalty.

RENT REVIEW

The rent shall be reviewed every 5 years during the Term. At each review date the rent shall be the higher of the passing rent immediately before the review date and the open market rent of the Premises as at the review date, assessed by reference to a willing lessor and willing lessee on the assumptions and disregards set out in the RICS Handbook of Rent Review (upwards-only review). If the parties cannot agree the reviewed rent, it shall be determined by an independent surveyor appointed, in default of agreement, by the President of the Royal Institution of Chartered Surveyors on the application of either party. The parties acknowledge that any uplift in SDLT on a rent increase may arise under Schedule 17A paragraph 9 of the Finance Act 2003.

REPAIR AND YIELDING UP

This Lease is granted on Internal Repairing and Insuring (IRI) terms. The Tenant shall keep the interior of the Premises (including internal walls, floors, ceilings, fixtures and fittings) in good and substantial repair and condition, and the Landlord shall be responsible for the repair of the structure and exterior and for insurance of the Premises. Yielding up shall be in accordance with the repairing covenant and the principles of the RICS Dilapidations Guidance Note (7th edition).

PERMITTED USE

The Tenant shall use the Premises for office use within Class E(g)(i) of the Town and Country Planning (Use Classes) Order 1987 (as amended) only and for no other purpose without the Landlord's prior written consent (such consent not to be unreasonably withheld or delayed in accordance with section 19(3) of the Landlord and Tenant Act 1927). The Tenant shall comply with all planning permissions, licences and statutory requirements applicable to the use of the Premises, including the Town and Country Planning Act 1990, the Health and Safety at Work etc. Act 1974 and all applicable fire-safety and environmental legislation.

ALTERATIONS

The Tenant shall not make any structural alteration or addition to the Premises. Non-structural internal alterations may be made with the Landlord's prior written consent, such consent not to be unreasonably withheld or delayed in accordance with section 19(2) of the Landlord and Tenant Act 1927. All alterations must comply with applicable Building Regulations (Building Regulations 2010, Approved Documents A-Q) and planning requirements and shall be removed and the Premises reinstated at the end of the Term if the Landlord so requires.

ASSIGNMENT AND SUBLETTING

The Tenant shall not assign, sublet, charge or part with possession of the whole or any part of the Premises without the Landlord's prior written consent (not to be unreasonably withheld or delayed). The Landlord may require the Tenant to enter into an authorised guarantee agreement on assignment in accordance with sections 16-17 of the Landlord and Tenant (Covenants) Act 1995 where reasonable to do so.

BREAK CLAUSE

The Tenant may terminate this Lease on 2028-06-01 by giving not less than six (6) months' prior written notice to the Landlord. The exercise of the break right is conditional only on the Tenant (i) paying all rent due up to the break date and (ii) delivering up vacant possession of the whole of the Premises on the break date. No other preconditions apply, consistent with the modern approach to break conditions following Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72.

SERVICE CHARGE

The Tenant shall pay a fair and reasonable proportion of the cost of the services provided to the Premises and the building of which they form part, calculated on the following basis: floor area pro-rata (850 sq ft of 4,200 sq ft total). The service charge shall be determined and certified in accordance with the RICS Professional Statement — Service Charges in Commercial Property (1st edition, 2018) (mandatory since April 2019). The service-charge provisions of Landlord and Tenant Act 1985 ss.18-30 do not apply to commercial lettings; the RICS statement provides the applicable reasonableness framework.

INSURANCE

The Landlord shall insure the Premises against the standard risks to their full reinstatement value with a reputable insurer. The Tenant shall pay the insurance premium (or a fair proportion of it) to the Landlord on demand as insurance rent, together with any increase caused by the Tenant's use or occupation.

STAMP DUTY LAND TAX

The Tenant shall be responsible for any Stamp Duty Land Tax arising in connection with this Lease under Schedule 5 to the Finance Act 2003 and shall file any land transaction return within 14 days of the effective date.

ESG, NET-ZERO AND SUSTAINABILITY UNDERTAKINGS

The parties acknowledge the United Kingdom's legally binding net-zero emissions target by 2050 under the Climate Change Act 2008 (as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019) and the wider environmental framework of the Environment Act 2021. In furtherance of those objectives:

(a) the Landlord and Tenant shall act in good faith to identify and (where economically reasonable) implement measures to improve the energy and water efficiency of the Premises during the Term, in line with the principles of the RICS Sustainability and ESG in Commercial Property Valuation Statement 2024;
(b) the Tenant shall, on reasonable request, share with the Landlord operational energy, water and waste data attributable to the Premises to enable the Landlord to meet any Streamlined Energy and Carbon Reporting (SECR) or Energy Savings Opportunity Scheme (ESOS) obligations and to support EPC re-rating as the MEES threshold rises towards EPC C from 1 April 2028 (as proposed by Government consultation);
(c) the Landlord shall give reasonable consideration to Tenant proposals for sustainability improvements (including LED lighting, low-energy HVAC retrofits, solar PV installation and EV charge-point provision), the cost and benefit of which shall be allocated as the parties may reasonably agree;
(d) the parties shall co-operate to comply with the Modern Slavery Act 2015 in respect of any goods or services procured for the operation of the Premises.

CODE FOR LEASING BUSINESS PREMISES 2020

The parties acknowledge the Code for Leasing Business Premises (England and Wales) 2020 (the "Code"), issued as a RICS professional statement. The Code is followed in this Lease save where the parties have expressly agreed to depart from it. The Tenant has been given sufficient time and opportunity to obtain independent professional advice in accordance with the Code.

DATA PROTECTION

The Landlord and Tenant are each data controllers of personal data they process in connection with this Lease. Processing is on the lawful bases of contract performance (UK GDPR Art.6(1)(b)), legal obligation (Art.6(1)(c) — including tax, building-safety and health-and-safety obligations) and legitimate interests (Art.6(1)(f)). Each party shall comply with the UK GDPR and the Data Protection Act 2018 (as amended by the Data (Use and Access) Act 2025), including the obligations in Articles 13-14 (information to data subjects), Article 32 (security) and Article 33 (breach notification — 72-hour ICO notification where feasible).

GOVERNING LAW AND JURISDICTION

This Lease is governed by and shall be construed in accordance with the law of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales in respect of any dispute or claim arising out of or in connection with it. A person who is not a party to this Lease has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce its terms.