Acumen Commercial Property Jargon-Buster
1954 Act: References to this are to the Landlord & Tenant Act from 1954. This was a major piece of legislation, but the main time that commercial property agents refer to this term is when they are discussing your right to stay at the property after the end of the contractual term. The 1954 Act states that you have a right to stay in the office, retail, warehouse or other commercial property at the end of the term unless the landlord has a very good reason to get rid of you (ask your lawyer for more details of what a “very good reason” could be). The landlord doesn’t always want this to happen, so he or she can contract out of the 1954 Act with you. If you contract out, you will have no right to remain at the end of the term.
Fully Repairing and Insuring: Has no fixed meaning I’m afraid. The essence of this term means that the building or building that your premise forms part of, will be maintained, insured etc by either you, the landlord, or a managing agent. You will be called upon to pay your share of all outgoings. If you have the whole of the building, you will have to pay 100%. If you own part of the building, you will have to pay a proportion. The proportion you pay will be dictated by the terms of the lease.
Rent Deposit: if a landlord is nervous that you may not be able to pay your rent for the whole of the term, he will take a deposit from you. This will usually be either 3 or 6 month’s rent. If you miss a rent payment, the landlord will have this security from you.
Rent Review: if there is no rent review clause in the lease, you will pay the initial rent for the whole of the term of the lease. This is not always appropriate, especially in longer leases. The landlord will therefore insert a “rent review”. On these dates the rent can be changed (usually increased) in line with prevailing market rates.
