Commercial Leases: The Pinball, The Why & The Weighty Tome

In my earlier article I argued that whilst the terms of a lease are paramount in their effectiveness to protect the rights of the landlord and tenant, they are often unnecessarily complex to navigate due to the different ways their drafting has evolved. In my time reading a substantial number of documents, 99% of which are electronic versions, I have come across certain layouts that are frustrating, to say the least.

Here are some examples.

The Pinball

This is maddening to the extreme. The lease starts with a menu of definitions on the first few pages of the lease. It then leads you deep into the document and you come across a term that needs defining, for example, the Term Start Date. Rather than stating the Term Start Date there andthen, it will say something like, ‘as defined in the Rent Start Date’. The reader is taken back to the start of the lease only to find that the definition of the rent start is defined as ‘The Contractual Start Date’ and we are taken even farther back until we finally find the definition we are looking for. How can this make sense?

The Indecipherable

You’ve just spent a few thousand pounds in getting your lease drawn up, and finally, just before completion, your representatives include the all-important dates in by hand. These include the date of the lease, the rent start date, perhaps some handwritten break or rent review dates. A few months later you refer to your lease to check the commencement date which is defined as ‘the term commencement date. And then you get this. Is it a five, a nine or even a zero?

Just when exactly does this commencement date start?

Why are some leases covered in crossings out, scribbles and often unreadable writing when we have word processing and a dry signature having the same weight in law as a wet one?

The ‘Why’?!

If we asked 1,000 landlords and 1,000 tenants what they considered to be the most important clauses within a lease, I doubt it would be a definition of ‘arbitration.’ And yet this can appear before any mention of the financial implications on the landlord and tenant. Indulge me if I am out of turn, but I would suggest the ‘rents’ are what is normally on most people’s minds. I recently read a lease where the rent appeared on page 36 of a 45-page document. WHY?

The Weighty Tome

I occasionally open an electronic document and discover it has more than 65 pages. My past experience has taught me that there may be a Schedule of Conditions annexed to the lease which I can ignore. The lease grows longer and longer as I scroll down, and it turns out that it has taken 65 pages to cover what would ordinarily take 32.

These are just a few examples but highlight the different ways leases are being drafted whilst all trying to offer the same protections as each other.

In my next article, I’ll try and look into whether there are some simple fixes we could all adopt.