Lease of Part — Letting Part of a Commercial Building UK Guide

Defining the Demise in a Lease of Part

The extent of the demise — what the tenant is actually leasing — must be defined with precision in a lease of part. Boundary conventions: the demise is defined by reference to a plan (usually a floor plan drawn to scale) and a boundary convention. Common conventions: internal face of external walls and structural elements (tenant takes the interior surfaces, not the structure itself); centre line of internal walls shared with other tenants; landlord retains the structure and external surfaces. Floor and ceiling: the demise typically runs from the finished floor surface to the underside of the raised floor above (not through the floor slab or ceiling void). Internal partitions: if the tenant installs their own internal partitions, these are typically tenant's fixtures and not part of the demise itself. Services within the demise: service pipes, ducts, and conduits within the demise are normally included in the demise where they exclusively serve the unit; shared services pipes running through the demise are landlord's retained services, subject to landlord's rights to maintain.

• Lease plan: must be drawn to an identifiable scale and show the demised premises clearly identified (typically edged or hatched); filed at Land Registry on registration
• Boundary convention: internal face of external walls and structural elements is standard; means the tenant has the interior of the unit but not the structural elements themselves
• Floor/ceiling: typically from finished floor to underside of raised floor above; the floor/ceiling void (containing services) is usually excluded and subject to landlord's access rights
• Shared internal walls: centre-line convention is standard; where walls are shared with adjacent tenants, each tenant's demise runs to the centre line
• Exclusive services within demise: pipes, cables, and ducts exclusively serving the unit are usually included in the demise and the tenant's responsibility to maintain

Access Rights and Easements

A tenant leasing part of a building needs rights to access and use the common parts — the entrance lobby, lifts, staircases, toilets, car parking, loading bays, refuse stores, cycle storage, and other shared facilities. In a lease of part, these rights are granted as easements (appurtenant to the demised premises) or as contractual licences (personal rights for the term of the lease). Key distinctions: easements are proprietary rights that attach to the demise and are enforceable against the landlord's successors in title; licences are personal and may not bind successors. In practice, the rights are granted specifically in the lease and their precise scope matters: a right 'to use the lifts' may not cover the use of the loading bay. Landlord's right to vary/manage common parts: the landlord typically reserves the right to vary the layout of the common parts, temporarily close and redirect access for maintenance or development, and add new facilities.

• Entrance and circulation: right to use the entrance lobby, reception, lifts, escalators, staircases, and corridors in common with other tenants and licensees
• Car parking: allocated spaces (assigned by number) or unallocated spaces (right to use a proportion of the total car park); specify whether 24/7 or limited hours
• Loading and goods: right to use the loading bay, goods lifts, and service areas — particularly important for retail and logistics tenants; specify weight limits and hours of access
• Toilets and welfare: right to use WCs, showers, and welfare facilities on shared floors — define which facilities and the number of users
• Landlord's right to vary: landlord reserves the right to alter the common parts layout, temporarily suspend access during maintenance/construction, and provide alternative access during works

Landlord's Reserved Rights

In a lease of part, the landlord retains extensive rights over the building as a whole, and these must be carefully reserved in the lease. Development rights: the right to build additional floors, extend the building, alter the common parts, add new tenants, and change the configuration of the building without the existing tenant's consent — subject to not substantially interfering with the tenant's use and enjoyment of the demise. Services rights: the right to lay new service pipes, cables, and ducts through the demise (with as little disruption as possible); to maintain, repair, and replace existing services running through the demise; to enter the demise on reasonable notice to inspect and carry out works. Signage and branding: the landlord typically controls all external signage (directory boards, fascia, external projecting signs) and restricts the tenant's ability to display signage without consent. Management powers: the right to manage and regulate the common parts including use policies (e.g., no smoking; security requirements; delivery times); car park management.

• Development rights: right to build, extend, alter, and redevelop the building without tenant's consent — critical for multi-let buildings where the landlord needs flexibility to expand or improve
• Services running through the demise: right to lay and maintain service pipes, cables, and ducts through the tenant's unit — with limited disruption; tenant cannot obstruct or cover services without landlord's consent
• Entry rights: right of entry for the landlord, managing agent, and their contractors on reasonable notice (except in emergency) to inspect, repair, and carry out works
• Signage control: landlord controls all external and common-parts signage; tenant's right to display signage in or on the demise subject to landlord's prior written consent
• Car parking management: right to regulate and manage the car park including reallocating spaces, introducing barriers/management systems, and restricting use during agreed periods

Service Charge in Multi-Let Buildings

Where a landlord lets part of a commercial building, they almost always operate a service charge — a mechanism by which the landlord recovers the costs of managing, maintaining, and insuring the building from the tenants. The service charge in a lease of part covers the landlord's expenditure on the common parts and the building as a whole: external walls and roof; structural elements; lifts and plant; cleaning and security; insurance premiums; management fee. Apportionment: each tenant's contribution is usually calculated by reference to their floor area as a proportion of the total lettable area; alternatively by rateable value; or by a fixed percentage stated in the lease. The RICS Professional Statement on Service Charges in Commercial Property (2018) sets best practice standards for service charge management and transparency. Certification: annual service charge accounts should be certified by an accountant; actual vs estimated — balancing charges and credits.

• Services covered: maintenance and repair of common parts; building structure; lifts and mechanical plant; cleaning and security; landlord's insurance premiums; managing agent's fees; professional fees
• Apportionment basis: floor area (GIA or NIA) as a proportion of total; rateable value; fixed percentage — clearly stated in the lease schedule
• RICS Service Charge Code (2018): sets best practice for service charge management; encourages transparency; 10-year long-term maintenance plans; accounts certified by independent accountant
• Cap and exclusions: some tenants negotiate a service charge cap (fixed maximum annual increase); exclusions may apply for major capital items; RICS Code discourages caps but they are common in practice
• Separate EPC: each self-contained demised unit requires its own Energy Performance Certificate; MEES compliance required for each let unit at letting and on renewal

Fire Safety and Building Safety Act 2022

Multi-occupied commercial buildings are subject to extensive fire safety obligations, and landlords of multi-let buildings bear primary responsibility for the building's common parts and structure. Fire Risk Assessment: the landlord (as the 'responsible person' for the common parts under the Regulatory Reform (Fire Safety) Order 2005) must commission and maintain a fire risk assessment for the common parts; the assessment must be reviewed and updated whenever there is a significant change. Fire doors: Fire Safety Act 2021 imposes additional obligations on owners of multi-occupied buildings with two or more sets of domestic premises — but commercial landlords should note that building-specific fire door maintenance obligations apply in mixed-use buildings. Building Safety Act 2022: introduces a new regime for 'higher-risk buildings' (buildings 18m+ or 7+ storeys with residential units); a Building Safety Manager may be required; Principal Accountable Person obligations. MEES and fire-proofing works: compliance upgrades required by MEES 2030 deadlines must not compromise fire compartmentation.

• Responsible person: landlord is the responsible person for common parts under RRO 2005; must commission fire risk assessment; keep it up to date; implement recommendations
• Fire safety provisions in lease of part: landlord's obligations for common parts fire safety; tenant's obligations for their demised unit; information sharing and cooperation obligations
• Building Safety Act 2022: for higher-risk buildings (18m+/7+ storeys with residential), creates Principal Accountable Person/Accountable Person obligations; golden thread of information; Building Safety Case; applies to mixed-use buildings
• Evacuation plan: landlord responsible for building-wide evacuation strategy; must provide emergency plans to all occupiers; coordinate with each occupant's own fire safety plan
• Works by tenants: any alterations within the demise must not compromise fire compartmentation, sprinkler systems, or means of escape; landlord's consent to alterations should specifically address fire safety compliance

Frequently asked questions