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Commercial lease – Short lease versus long lease


Commercial lease – Short lease versus long lease

When negotiating a lease one of the most difficult questions to resolve is what length of term should the lease be for?

In the past when it was a landlord’s market, the landlord would be looking for long leases to ensure that the premises were let for a long period of time. In today’s markets more and more business are taking up short terms leases.

Short lease

The benefit of a short lease is that it provides you with more flexibility, if you are just setting up a business you might want to avoid being tied to a long lease on the property which could prevent you from moving /expanding.

You also have to consider stamp duty, generally, the longer the lease and the higher the rent the more stamp duty payable.

Long lease

If you are investing a lot of money into the property when you take occupation you might want a long lease to ensure security over the property.


Both short and long leases can have agreed terms that work to your needs, for example if you are a tenant under a short lease provided the Landlord and Tenant Act 1954 has not been excluded, (except in certain circumstances) the tenant will be able to request that a further lease is granted on the expiry of the current lease. The new lease terms will need to be agreed between the tenant and the landlord or if required an expert or the courts.

A tenant looking at a longer lease could consider having a break clause, the more flexible the better i.e. a rolling break clause after so many years that allows termination on notice. Likewise if the lease allows you to assign (pass the lease) to a new tenant then this may provide you with any flexibility you require during the lease term i.e. the ability to leave these premises and move to bigger premises.

If you need any assistance in negotiating the terms of a new lease or you have already agreed terms and require a solicitor to advise on the draft lease please contact Christie Limb (climb@fidler.co.uk)  she would be happy to provide you with a fixed fee quote for the work.

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