Jump to Main Content

Commercial property leases

Commercial property leases

What is a commercial property lease?

A lease is a written agreement that gives you permission to occupy and trade from a property for an agreed amount of time. The agreement will outline how much you will be expected to pay and how you will pay it – this could be monthly, quarterly, or annually, for example.

You will be expected to uphold your side of the agreement but so will the landlord. If your agreement states that the landlord must pay the utility bills or keep the building in good condition, you should ensure you know what is expected from both parties so you are protected.

What do you do if you cannot pay your lease?

The first thing you should do is contact your landlord and explain your situation. If you’re honest, your landlord may be more inclined to try and help you out, rather than not paying them without good reason.

If your landlord is unwilling to accept a payment break or negotiate new terms, and you no longer want to use the premises,  you may want to see if there is an early exit clause (sometimes known as a ‘break clause’) in your lease, or whether you are allowed to sublet the property to somebody else.

If you feel like you’re not going to be able to proceed with the terms of your lease in the long term, you may want to explore whether you can stop your agreement early. You may have to pay a fee to do this, but it could be more cost effective long term.

What will happen if you miss your agreed payments?

If you fail to pay up and do not make an effort to rectify this, your landlord will be within their rights to take action against you to ensure they are covered financially.

Your landlord could appoint a bailiff to visit you and take control of any goods that are deemed sellable in order to raise the required funds to cover your debt. You will be given sufficient notice before this happens.

If the situation escalates, you could also be handed a County Court Judgment and this would last on your credit file for 6 years, which would have an impact on your ability to obtain credit in the future. The landlord of the property you are renting could also petition to make you bankrupt if you owe them more than £5,000, so it’s certainly worth keeping an eye on how much you owe.

Can the property be taken off you?

Landlords may be within their rights to use forfeiture – a process whereby they can end your agreement early if you are in breach of it as a result of:

  • Being in arrears with your rent
  • Being made bankrupt or going into liquidation
  • Failing to correctly maintain or insure the premises you are renting

If you find you have breached the terms of your agreement and the landlord opts to use forfeiture, they can do so by taking possession of the premises through peaceful entry (such as changing the locks) or by appealing to the court to take suitable action.

You can appeal against forfeiture but you will need to seek legal advice and receive a get a ‘relief from forfeiture’ notice from the court.

If your landlord will not bring the lease to an early end, and if you are unable to do this, then you may be liable to pay the rent on the premises until the full length of the lease runs out. This would be the case even if you stopped trading and closed your business down. In this situation, your landlord can still take further action to recover what you owe. You may also be liable for the business rates on the premises.

Get free debt help

If you are self-employed and have found yourself in financial difficulty, PayPlan may be able to find a solution for you. Get free debt advice and help from one of our advisers at www.payplan.com or call 0800 316 1833 . Phone lines are open Monday-Friday 8am-8pm and Saturday 9am-3pm.

Let’s make life more affordable

You’re just two steps away from taking back control of your finances and freeing up more money for you and your family.

No impact on your credit score.

Excellent, professional, friendly and empathetic service. PayPlan have given us our lives back!
Sandra Daly

Sandra Daly

5 stars
pdhf-pound pdhf-pound-coinspdhf-poundspdhf-pound-notespdhf-house-ownpdhf-house-rent pdhf-house-family pdhf-briefcasepdhf-job-seekerpdhf-retired pdhf-working-hourspdhf-studentpdhf-jobpdhf-phonepdhf-house-otherpdhf-debt-2pdhf-debt-3pdhf-debt-4 pdhf-debt-1pdhf-yespdhf-nopdhf-checkpdhf-livechatpdhf-self-employedpdhf-whatsapppdhf-intercom

What's your approximate level of debt?

Great! It looks like we can help you.

Simply complete your details below and connect to one of our friendly advisers.

How would you like to connect?

Best time for us to call

Excellent, professional, friendly and empathetic service. PayPlan have given us our lives back!
Sandra Daly

Sandra Daly

5 stars
100% secure & confidential
0800 316 1833 Request Call Back