Commercial Leases - Can we make some simple improvements?
I want to stress to start with that I appreciate that not all leases are the same and that my views are based on English Commercial leases. They vary for a number of reasons depending perhaps on whether they refer to a retail unit, an office, 100m2 of space or 10,000 m2 of space - the reasons are endless. They are all drafted to meet the needs of the parties who will rely on them in the future and by their nature will be different.
I also appreciate that some of the leases I read are easier to navigate than others and in general the older the lease the more likely it is to be difficult to pick your way through it. More and more leases contain an index (some entirely overly populated), there has been the introduction of Prescribed Clauses and generally a better layout of definitions. They are getting more straightforward.
I do however think we could take some modest little steps as we draft new leases, to make them more akin to the 21st Century. Clearly, it will take time as older lease leases come to an end but why not consider a few slight changes?
Layout
I appreciate why the layout of a lease has not changed in the past, as they used to be paper documents that were extremely difficult to edit or amend. Today, we can move the layout around with ease. Why can’t we agree to a more standard layout of the lease, which puts 'important' clauses (rents, review provisions, breaks etc) for the landlord and tenant, in a more prominent and perhaps, more importantly, logical order? Why do I find a rent provision on page 36 of a lease, behind the clause that protects the landlord from the tenant putting too much weight on a ground-floor retail unit with no basement? Surely it would make sense to put related clauses together, why do we find the penalty interest clause randomly placed toward the end of a document albeit that it specifically relates to a clause that defines rent. Why are they not together?
A Map
Why can’t we have a simple page or two after the front cover of the lease which lists in a straightforward manner the core elements of the lease? The term, the rent, the rent start date, the service charge date, the rent review dates, break dates, etc. Why can't we do away with the 'definition ping pong' where we are bounced around the lease looking for definitions. These are simple things that would make the document easy to access. Needless to say, for example, if you need to look into the rent review provisions in more detail, you will have to refer to the full clause.
I am sure there are some reading this who will think my thoughts are trivial, unnecessary and frankly an excuse to create more work for a system that works fine at the moment. It’s a reasonable point. But we are now living in a world where the quill, ballpoint pen, the typewriter are no longer used and can implement changes, after the initial pain, easily. The lease has evolved but not in a structured, logical and layman-friendly, way.
I’ll put my neck out in the final article and propose a Map, any input into the debate is always appreciated.