What is Residential & Commercial Leasing?

A lease is a signed agreement which permits the user to then pay the owner for the use of an asset. Common assets that can be leased are properties, buildings, and vehicles.

Leasing not only offers financial flexibility but also risk management and tax benefits. With lease agreements, the complexities of equipment and property rental are simplified due to the structure and stability the clear terms and conditions offer for all parties involved.

What is Residential Leasing?

A residential lease is a contract between a landlord and a tenant which outlines the details of the terms in which the tenant can use or occupy the landlord’s property.  

Common Types of Residential Lease Agreements

• Fixed-term Lease: A lease with a set and end date, typically lasting six months to a year or more
• Periodic Lease: A lease that continues a rolling basis (e.g. month to month) until ended by either party
• Short-term Lease: Usually used for vacation rentals or temporary housing
• Assured Shorthold Tenancy (AST): The most common type of residential lease in the UK, which provides specific tenant rights and landlord obligations  
• Assured Tenancy: Offers more security to tenants, allowing them to stay as long as they abide by the terms
• Regulated Tenancy: A rare lease type offering long-term tenant protections under the Rent Act 1977

Tenant Rights & Responsibilities

• Must comply with the terms and conditions of the lease agreement
• Responsibility to pay rent on time and in full
• Have respect for neighbours and adherence to community rules
• Protection from unfair eviction under tenancy laws
• Right to a safe and habitable living environment
• Right to receive official notice before rent increases

What is Commercial Leasing?

A commercial lease is a legally binding contract made between a business tenant, your company, and a landlord. This contract lets you use the property for business activity for a confirmed set period and, in return, the landlord will receive payments from the tenant.

Key Differences Between Residential & Commercial Leasing

Residential leases are for living spaces, whereas commercial leases are purely for business spaces. Another key difference between the two is that commercial leases are usually a lot longer duration than residential leases.

Often, commercial tenants have a larger responsibility to care for the property maintenance and repairs in comparison to residential tenants. Finally, residential leases are far less complex in legality than commercial leases which require legal oversight.

Types of Commercial Leasing

• Gross Lease: Where the landlord covers majority of property expenses
• Net Lease: Where the tenant is responsible for specific expenses
• Single Net Lease (N lease): The tenant pays rent and property taxes, the landlord covers other expenses
• Double Net Lease (NN lease): Landlord covers maintenance whilst the tenant pays rent, property taxes and insurance
• Triple Net Lease (NNN lease): Tenant is responsible for all expenses

Why Seeking Legal Advice for Leasing is Important

If or when leasing disputes between the landlord and tenant occur, seeking legal advice from a solicitor will lead you to the best course of action.

Here at Caversham Solicitors, we can support you with any issues you may have regarding residential or commercial leasing. Our team cover the topics of rent deposits, authorised guarantee agreements and guarantees, Landlord and Tenant Act 1954 exclusions, terminations and renewals, deeds of variation and lease renewals, and residential lease extensions.

Be sure to contact us at Caversham Solicitors with any enquiries.