As you’re moving in you’re asked to sign a second document called a deed of lease. You may be thinking “hang on, haven’t I already signed the lease? Why do I need to sign something else?”.
Here’s a common scenario: You’ve found the perfect premises for your business and, after a little back and forth over the lease terms, you’ve signed an agreement to lease which was put together by the landlord’s agent.
To start with you need to be really clear on the sort of document that you have already signed. You may have just signed a heads of agreement which isn’t actually binding on you or the other party. Alternatively, you may have signed an agreement to lease which will only lock you and the other party into the lease once certain conditions are met.
So, you firstly want to make sure you’ve got a fully binding and unconditional agreement to lease. Cavell Leitch can help you ensure that you’re fully aware of all the obligations you’re signing up for so you don’t make any commitments you’re unable to keep.
However, the agreement to lease only tells you part of the story. To fully understand your commitments, you will need to be familiar with the contents of the deed of lease as well.
The agreement to lease and the deed of lease are then different documents:
Clause 4.1 of a standard ADLS agreement to lease document anticipates that a further deed of lease document will be drawn up by the Landlord’s solicitor. Each party will normally pay their own legal costs associated with the negotiation and preparation of both the agreement to lease and deed of lease documents.
In short, no, you don’t need to sign a deed of lease if you already have an unconditional agreement to lease in place.
It is useful to sign a deed of lease as well as an agreement to lease. If the parties sign a deed of lease document then there shouldn’t be any ambiguity as to how the lease will work day-to-day.
However, it is not essential to sign a final deed of lease. Clause 4.3 of a standard agreement to lease states that the terms and conditions of a standard deed of lease will apply even if an actual deed of lease document hasn’t been signed.
We always suggest to our clients that they do take the next step and sign a deed of lease. There are several benefits to signing a deed of lease document:
In conclusion it is incredibly useful to sign up a deed of lease document, even if you’ve already signed an agreement to lease. In fact, it is a very good idea to understand exactly what a deed of lease contains before you sign an agreement to lease. The leasing process may sound a little convoluted, but it needn’t be confusing. Cavell Leitch’s expert property team can guide you along each step of the process.