Draft Introduction to Leases for CLAS Website

CLAS Topic: Leases

Heads of Terms (Scotland)

In order to operate successfully on land owned by someone else, you need to agree with the owner what you can do, where and for how long. The owner may have other requirements and the best way to ensure everyone sticks by what is agreed is to have it in the form of a lease.

A lease needs to have certain basic elements and can be drawn up by a solicitor. The longer your solicitor has to spend negotiating on your behalf, the more this work will cost. The best way to keep those costs to a minimum is to agree as much as possible before instructing the solicitor (but bear in mind that your solicitor may have valuable advice on the best position for you to accept so you may wish an initial consultation). The details needed are often referred to as “Heads of Terms.”

Essential

 Define the site; mark up a plan and show the access also

 Define the start date and length of the lease

 Define the rent to be paid and when it is to be paid

Optional Additions

 The permitted uses

 Maintenance obligations

 What changes may or may not be allowed to the site?

 What happens to any improvements or additions (perhaps specifically to include the last harvest) to the site when the lease ends and if the rent is reviewed?

 Will the rent be reviewed at set intervals?

 Responsibility for insurance

 Will there be an option to renew the lease at the end, and if so, by which party and how will it be exercised?

 Will there be a “break” clause – an option to end the lease at any set point and, if so, by which party and how will it be exercised?

 Is there any right for the tenant to “assign” or transfer their rights in the lease to another party?

 Responsibility for the expenses in finalising the lease www.communitylandadvice.org.uk CLAS: Heads of Terms. Version 1, 2012 p1 Feedback

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www.communitylandadvice.org.uk CLAS: Heads of Terms. Version 1, 2012 p2