How to review a commercial lease in England

A commercial lease is a long-term contract with statutory rules layered on top. Several of those rules are moving: Parliament has passed a ban on upwards-only rent reviews, the Law Commission is reviewing the Landlord and Tenant Act 1954, and the energy efficiency standards for let commercial buildings have been reset. This checklist covers what to check in a business lease of premises in England and how to redline it in Word with LexDraft.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

Before you start

• Read the heads of terms. Check that the draft matches the agreed rent, term, breaks, incentives and repairing position.
• Identify the premises precisely. Plans, demised parts, common parts and rights granted and reserved.
• Check formalities. A lease for more than three years must be made by deed, and a lease for more than seven years must be registered at HM Land Registry.

Clause checklist

• Security of tenure. A business tenant in occupation usually has a right to renew under Part 2 of the Landlord and Tenant Act 1954. The parties can contract out, but only if the landlord serves a warning notice before the tenant is contractually bound and the tenant makes a simple declaration (or a statutory declaration if the notice was served less than 14 days before). Check that the procedure was followed and the lease refers to it. The Law Commission is reviewing the 1954 Act; its second consultation closed on 16 September 2026 and it has provisionally said contracting out should stay. Nothing has changed in the law yet.
• Rent review. The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026 and bans upwards-only rent reviews in new business leases. The ban is not yet in force: it starts on a date to be set by regulations, and commentators expect that no earlier than 2027. Renewals under options entered into on or after 17 March 2026 are within scope, stepped rents are not caught, and the government has said it will consult on collars and caps. Existing leases are generally unaffected. Draft review clauses for leases that may complete after commencement with this in mind.
• Repairs. Full repairing obligations on an old building can make the tenant pay to put it in better condition than it was let. Consider a schedule of condition. Damages for breach of a repairing covenant at the end of the lease are capped at the loss in value of the landlord's reversion by section 18(1) of the Landlord and Tenant Act 1927.
• Alienation. Where assignment or subletting needs the landlord's consent, it cannot be unreasonably withheld (section 19 of the 1927 Act), and the landlord must give a decision within a reasonable time (Landlord and Tenant Act 1988). Check any pre-agreed conditions, such as an authorised guarantee agreement under the Landlord and Tenant (Covenants) Act 1995.
• Service charge. Check what is recoverable, caps, sinking funds and the year-end reconciliation. The RICS professional statement on service charges in commercial property sets out expected practice.
• Break clauses. Courts apply break conditions strictly. Conditions such as "vacant possession" or "no breach of covenant" are traps; aim for payment of rent and giving back the premises as the only conditions. There is no implied right to a refund of rent paid in advance for a period after the break date (Marks and Spencer v BNP Paribas [2015]), so ask for an express one.
• Use and planning. Check the permitted use against the planning position and any restrictions in the landlord's title.
• Energy efficiency (MEES). A landlord generally cannot let a non-domestic property with an EPC rating below E unless an exemption is registered. In June 2026 the government said larger let buildings (over 1,000 square metres) will need EPC B from 2031 where cost-effective, and dropped the planned 2027 interim C step. Secondary legislation is still needed, so check the current position and add a clause on who pays for any works.
• Remedies. Forfeiture for breach, interest on late payment, and Commercial Rent Arrears Recovery, which replaced distress for rent.
• Insurance and reinstatement. Who insures, what risks, rent suspension and what happens if the premises cannot be reinstated.

Review the lease in Word with LexDraft

1. Open the lease in Word, open LexDraft from the Home tab and set the jurisdiction chip to UK: England & Wales (or UK: Scotland or UK: Northern Ireland if that is the governing law).
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. LexDraft has four built-in playbooks (NDA, SaaS MSA, DPA and services agreement) and no dedicated lease playbook, so this runs as a general review against the governing law you chose. Use the checklist on this page to direct your own read. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
4. Accept or reject each proposed redline. Accepted edits land as native Word tracked changes, ready for the other side.
5. Ask the Assistant to explain a clause in plain English or suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to rely on in the Case law tab, then open the judgment on Find Case Law and read it yourself. UK judgments in LexDraft come from The National Archives' Find Case Law service, which only partially represents the activities of the courts and tribunals. Not every judgment or decision is included. Find Case Law does not include judgments from Scottish or Northern Irish courts or tribunals.

LexDraft does not give legal advice and does not summarise judgments. AI output can be wrong, so qualified counsel must check every redline before it goes out.

Common mistakes

• Agreeing a conditional break and then losing it over a minor breach.
• Signing before the contracting-out declaration is made.
• Copying an old precedent with an upwards-only review for a lease that may complete after the ban starts.
• Using "Premises", "Property" and "Demised Premises" for the same thing. The defined-term check catches this.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.