Agreements for lease with development obligations—early access
Agreements for lease with development obligations—early access

The following Property practice note provides comprehensive and up to date legal information covering:

  • Agreements for lease with development obligations—early access
  • The building contract
  • Service charge and insurance rent
  • Stamp Duty Land Tax (SDLT)

Certification of practical completion under the agreement for lease (usually prompted by certification of practical completion under the building contract) triggers the tenant’s obligation to start paying rent (subject to any rent-free period). The tenant will therefore want to start trading from the premises as soon as possible after practical completion in order to earn an income from the premises to offset its rent liability. Consequently, it will want to have had early access to the premises before the date of practical completion in order to complete any necessary fit-out works.

Typically, the tenant will want to start fit-out works 4-6 weeks before practical completion, but more extensive and complicated works can take considerably longer and may have to be scheduled far earlier in the build programme. The ability to have early access tends to be high on a tenant’s list of must-haves in relation to any agreement for lease and, ordinarily, early access suits the developer just as much as it does the tenant. However, there are a number of issues that need to be addressed.

The building contract

If the tenant is to enjoy early access, the developer must be able to deliver it, meaning that the developer must require the building contractor to complete the premises by the date for early access set out in the agreement for lease. Ordinarily, a building contractor

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