Meanwhile Use Toolkit

Set-up checklist

Getting started

Email to landlords

Information sheet for landlords

Risk assessment template

Guidance on Meanwhile legal agreements, and templates

TEMPLATE HOTS FOR A MEANWHILE LEASE

Once you have found a suitable property, you and the landlord will need to begin by preparing the preliminary document which sets out the agreed commercial terms. These are called Heads Of Terms (‘HOTs’). The parties can prepare the heads of terms unassisted, or they may wish to instruct a surveyor to assist.

This is a vitally important stage as it sets out the terms of the commercial deal agreed between the parties mitigating the risk of proceeding further without a full picture of the terms on offer. It will form the basis on which the lease will be drafted. It provides a helpful tool to structure initial conversations and ensure all parties are on the same page. You can download the template for HOTs lease template from the link below.

HEADS OF TERMS LEASE TEMPLATE

The Guidance Note in our Explanatory notes for the legal documents page (Guidance Note also available below under ‘Guidance Note‘)will also assist you when agreeing the HOTs as it runs through each provision in the Meanwhile Use lease – the core terms of the lease are reflected in these precedent HOTs, so this note will help you to understand each provision.

TEMPLATE HOTS FOR A MEANWHILE SUB-LEASE

A sub-lease is likely the most appropriate option if:

1. The sub-tenant will occupy the property for 6 months or more;
2. You wish to grant the sub-tenant exclusive possession of all or part of the property; or
3. You wish for the tenant to have a higher degree of control over the Property.

You will need to ensure that you are permitted to grant a sub-lease under your head-lease and when agreeing HOTs you must ensure that they do not exceed those in the headlease. Please note that you will likely need to obtain consent from the superior landlord to sub-let the property, as per the condition in your lease.

You can download the template for the sub lease HOTs from the link below.

SUB LEASE HEADS OF TERMS TEMPLATE

If you would like to grant a sub-lease of the property to a third party, please refer to the section on Sub-leases in the separate Guidance Note available on our Explanatory notes for the legal documents page. (Guidance Note also available below under ‘Guidance Note‘).

TEMPLATE LICENCE

Licences are suitable for use where:

1. the property be occupied for less than 6 months; or
2. where the space is shared, and the tenant does not enjoy exclusive use and a specific demise not allocated.

You will need to ensure that you are permitted to grant a licence under your head-lease and when agreeing HOTs you must ensure that these do not exceed those in the head-lease.

You will also need to notify the landlord of your intention to grant a licence, as per the terms of your lease.

You can download the template for licence from the link below.

LICENCE TEMPLATE

If you would like to grant an occupational licence to a third party, please refer to the section on Licences in the separate Guidance Note available on our Explanatory notes for the legal documents page.

EXPLANATORY NOTES FOR THE LEGAL DOCUMENTS

The explanatory notes below will help you follow what steps and legal documents are needed at each stage in the process of taking on space and then sharing or sub-letting it to others.

Guidance note

A lease is essentially a contract between a landlord and tenant that gives the tenant the right to occupy and use the landlord’s property for a period of time. As with any other contract, the terms of the lease will need to reflect the circumstances and the parties’ needs when the lease is granted.

The intention is that the government’s precedent ‘Meanwhile Use’ lease is used as this strikes a fair balance between the parties for the circumstances of meanwhile use. A copy of the precedent lease (and the government guidance notes) is available from the following link: https://www.gov.uk/government/publications/meanwhile-use-lease-and-guidance.

This guidance note seeks to provide some clarity and explanation of the key terms of the lease and guidance as to what might be reasonable to agree. It also provides guidance as to how some of the blank sections of the lease will need to be completed. However, we would of course always recommend that all parties seek their own legal advice.

You can download the guidance note from the link below.

GUIDANCE NOTE

Process note

Whilst the process largely remains the same whether you are tenant or landlord, the landlord will carry out different steps in the process and will approach each step from a different perspective to the tenant, i.e. they would draft the lease, they would not need to carry out the same level of due diligence, they would serve the LTA 1954 notice and would not need to pay the completion monies. In that sense, whilst this Process Note is designed for tenants, it will of course be useful for landlord members to see the process and the advice given to tenants.

You can download the process note from the link below.

PROCESS NOTE

LTA sheet for unrepresented

Under the Landlord and Tenant Act 1954 (“LTA 1954”), a tenant with a business tenancy (i.e. relating to commercial or business premises, rather than residential property) will have an automatic right at the end of the lease term to renew the lease on the same terms (i.e. same rent) as the original lease.

The parties can agree to exclude from the lease the security of tenure provisions set out in sections 24-28 of the Landlord and Tenant Act 1954 (the Act) which would serve to extinguish the tenants right to automatic lease renewal. This sheet explains this process and the steps the two parties need to take.

You can download the LTS sheet for unrepresented from the link below.

LTA SHEET FOR UNREPRESENTED

LTA54 NOTICE AND STATUTORY DECLARATION

Landlord notice to exclude Sections 24 to 28 of the Landlord and Tenant Act 1954

A tenant has a statutory right to remain in occupation of a property at the end of the term if it occupies that property for the purposes of its business. The landlord will likely ‘contract out’ of these provisions of the Landlord and Tenant Act 1954 (LTA 1954) to ensure that the tenant does not have the benefit of the statutory right to remain in occupation once the lease expires. In layman’s terms, once your lease expires you must vacate the property. This is usual practice and will be agreed at HOTs stage.

In order to contract out of the LTA 1954, the landlord will need to serve notice on the tenant in the prescribed form prior to the date of the lease. You can download the template for the Landlord notice from the link below.

LANDLORD NOTICE TEMPLATE

Statutory declaration

The tenant will then need to swear a statutory declaration in the presence of an independent solicitor or commissioner of oaths prior to the date of the lease. You will be able to find a solicitor to witness this here: https://solicitors.lawsociety.org.uk/. The solicitor will charge you a set fee fixed by the Law Society which currently is £5 which you will pay in cash.

Technically, if the tenant has been served notice at least 14 days prior to the start date of the lease, they are able to sign a simple declaration which will not need to be sworn in the presence of an independent solicitor or commissioner of oaths. However, it is usual that a statutory declaration is used regardless of when the notice was served. This is because the landlord will not be able to issue the notice until the lease is in an agreed format, so it may cause unnecessary delays if the parties then have to wait 14 days before signing the lease. In considering the above, it is recommended that tenants swear a statutory declaration.

You can download the template for statutory declaration below. Please note that the first template is for individual tenants and the second template is for corporate tenants.

INDIVIDUAL TENANTS STATUTORY DECLARATION TEMPLATE

CORPORATE TENANTS STATUTORY DECLARATION TEMPLATE

Further guidance on the Landlord and Tenant Act 1954 can be found in the ‘LTA Sheet for Unrepresented Tenants’ which is also available on our Explanatory notes for the legal documents page.

HIRER’S AGREEMENT

Hirer’s agreements are appropriate for situations where:

1. the property will be hired for a very short term; or
2. the property will be hired for a one-off event.

You will need to ensure that you are permitted to hire out the property under your head-lease.

You can download the Hirer’s agreement template from the link below:

HIRER’S AGREEMENT TEMPLATE

If you would like hire out the property, please refer to the relevant section on Hirer’s Agreements in the separate Guidance Note on our Explanatory note for legal documents page.