Rent, VAT and interest

Rent

The tenant should give an express covenant to pay the principal rent on the specified dates. If there is a rent free period, the lease should specify a rent commencement date and state that the tenant’s obligation to pay starts on that date.

VAT

The tenant should give an express covenant to pay any VAT which is payable in addition to the rent.

Interest

The lease should set out the interest rate that will apply to any late payments. This will usually be between 2 and 4% above the base rate of a specified bank. The tenant should covenant to pay interest on any payment not made on its due date.