The landlord must anticipate the rights it will need over the Property during the term of the lease and reserve them expressly. These should include not just rights to enter the Property but also rights to do things on any adjoining land that may have an adverse effect on the tenant’s enjoyment of the Property.

Rights to enter

The landlord should always have the right to enter the Property, to inspect and, where the tenant is in breach, to carry out repairs or remove unauthorised alterations. This is known as a Jervis v Harris clause (Jervis v Harris 1996 1 All ER 303). It enables the landlord to enter the Property, carry out repairs and recover its costs from the tenant as a debt, rather than damages (see Practice Point). This technical distinction has two important practical consequences:

• The landlord does not need to get a court order, which would otherwise be required if the lease was granted for seven years or more and had at least three years left to run (Leasehold Property (Repairs) Act 1938.
• Section 18 Landlord and Tenant Act 1927 (LTA 1927) restricts the amount a landlord can recover in damages for disrepair but this does not apply to costs incurred under a Jervis v Harris clause.

Right to use services

Utilities serving the rest of the building may run through the Property, so the landlord should reserve an express right.

Rights to alter common areas

A lease of part of a building or estate will grant the tenant rights over common areas. The landlord will not be entitled to alter those areas without an express right to do so.

Rights to develop adjoining land

If the landlord owns or may acquire land adjacent to the Property, it must reserve clear rights to carry out works, including redevelopment of the adjacent land. If there are no express rights, the tenant might be able to argue that the works interfere with its enjoyment of the Property and that the landlord is undermining what it agreed to grant the tenant (“derogating from grant”). The reservation should allow the landlord to carry out works on adjacent land, whether or not the landlord actually owns it. Without this wording, if the adjacent land is owned by a joint venture in which the landlord is participating, there is an argument that the landlord cannot rely on the reservation (Paragon Finance v City of London Real Property)

Term

Commercial leases are almost always granted for a fixed term, which should be clearly stated. The term commencement date is important. Rent reviews and the exercise of break rights usually happen on anniversaries of this date. Landlords often require lease terms to commence on the quarter day immediately before the date the lease is actually granted (so a lease granted on 1 September would have a term commencement date of 24 June). This means significant events such as rent reviews and break rights take effect on quarter days, helping the landlord to keep track of them. This does not mean that the obligations in the lease will bind the parties before the lease is actually completed, unless the parties expressly agree that they will.