The Preliminary Lease Agreement is commonly used in England and Wales when parties wish to secure basic terms of a lease arrangement while finalizing detailed negotiations. This document typically precedes the formal lease agreement and includes essential information about the property, proposed rental terms, duration, and any specific conditions that must be met before the formal lease can commence. It provides security for both parties during the negotiation phase and helps prevent either party from withdrawing without valid reason. The agreement is particularly useful in commercial property transactions where detailed due diligence and fit-out works may be required before the formal lease can be executed.
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1. Parties: Details of the landlord and tenant
2. Background: Context and purpose of the preliminary lease agreement
3. Definitions: Key terms used throughout the agreement
4. Property Description: Detailed description of the premises to be leased
5. Term: Duration of the proposed lease
6. Rent: Proposed rental amount and payment terms
7. Conditions Precedent: Conditions that must be satisfied before the lease becomes effective
1. Break Clause: Option to terminate early - used when parties want flexibility to end the lease before its natural expiration
2. Rent Review: Provisions for adjusting rent - typically included for longer-term leases
3. Service Charge: Additional charges for services - included for multi-tenant buildings or when services are provided
4. Assignment and Subletting: Rights to transfer the lease - included when transfer rights are to be negotiated
1. Floor Plans: Drawings showing the premises and their boundaries
2. Condition Schedule: Schedule documenting the current state of the property
3. Service Charge Schedule: Detailed breakdown of service charges and their calculation methodology
4. Fitting Out Specification: Details of any permitted alterations or improvements to the premises
5. Rights and Reservations: Schedule of specific rights granted to the tenant and those reserved by the landlord
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