Heads of terms for a commercial lease template
Heads of terms set out the main terms a landlord and tenant have agreed in principle for a new commercial lease, before the solicitors draft it. They cover the parties and advisers, the property, the length and type of lease, the rent and other payments, any break, repair, alterations and dealings, and the conditions and timing. They are subject to contract and not binding, except for any paragraph marked binding, such as exclusivity or confidentiality.
Made by DocuWeave. Use at your own discretion.
What changes each time
17 values. Everything else is your wording, kept exactly.
Parties and property
- Landlord, tenant and guarantor
- Solicitors and agents
- Property address
- Description and rights
The lease
- Term
- Security of tenure
- Use
- Break
Rent and payments
- Rent
- Rent-free period
- Rent review
- Service charge
- Deposit
Conditions and costs
- Conditions
- Target completion
- Contribution to landlord's costs
- Exclusivity
The rules it usually needs
Written in plain English when the template is set up.
- The AI decides from the paperwork
“Include the break clause only if a break has been agreed.”
The agent's email recorded a tenant-only break on the fifth anniversary, so the break clause was included, with that reason shown.
- Only when…
“Add the tenant's break conditions when the tenant can break, and the landlord's permitted reason when the landlord can.”
Only the tenant could break, so the tenant's conditions were included and the landlord's reason left out.
- Only when…
“Mention a schedule of condition only when repair is limited by one.”
Repair was limited by a schedule of condition prepared by the tenant's surveyor, so the sentence was included.
- One of several wordings
“Each side pays its own costs, or the tenant contributes to the landlord's legal costs, with or without VAT.”
The tenant agreed to pay up to £1,500 plus VAT, so that wording was used.
- The AI decides from the paperwork
“Include the binding exclusivity and confidentiality paragraphs only if they were agreed.”
The landlord asked for 4 weeks' exclusivity and for the terms to be kept confidential, so both binding paragraphs were included.
- Once for each item
“One line for each condition the lease depends on.”
The email named two conditions: satisfactory references and the landlord's lender consent.
One worked example, start to finish
The heads of terms for a commercial lease in DocuWeave, from upload to approval.
1The document uploaded
The heads of terms, a Word file, uploaded as they are.
- 2
The template it became
It found 21 sections and 55 values, and asked 14 questions before publishing. The break clause appears only when a break was agreed.
3The paperwork dropped in
The agent's offer email, the landlord's approval, the property particulars and a short typed note.
4What was found, with sources
53 of 55 values filled from the paperwork, each with the passage it came from.
5What it asked
8 things for a person, starting with the date of the heads, which the two emails gave differently.
6The approved output
Approved, with Word and PDF downloads.
A free heads of terms for a commercial lease to download
- Heads of terms, filled with fictional details (Word)
- Heads of terms, filled with fictional details (PDF)
Use it as it is, or upload it to DocuWeave and make it a template.
DocuWeave is not a law firm. A general template for common situations in England and Wales. It is not tailored to you and we do not update it when the law changes, so check it suits your situation before you use it. Terms.
Made by DocuWeave. Use at your own discretion.
Questions people ask
Are heads of terms legally binding?
Usually not. They are marked subject to contract, so neither side is committed until the lease is completed. Particular paragraphs, such as exclusivity or confidentiality, can be made binding, and these say so.
What is contracting out of the 1954 Act?
A business tenant normally has a right to renew its lease. Landlord and tenant can agree to exclude that right, but only by following the notice and declaration steps before the tenant is bound, which these heads spell out.
What is a rent-free period?
A period at the start of the lease when no rent is paid, often given in return for the tenant fitting out the premises. The heads record how long it is and on what terms.
Who pays the legal costs?
Usually each side pays its own, but a tenant sometimes contributes to the landlord's legal costs. The tenant pays any Stamp Duty Land Tax and Land Registry fees on the lease.
Is there a code for business lease negotiations?
Yes. The Code for leasing business premises sets out what landlords and tenants can expect, and both sides should take advice from a solicitor and a property adviser.
Use this template
It opens in DocuWeave as a template you can check, change and publish. Nothing is used until you do.