The Commercial Lease Explainer: The Plan

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So you have a keen tenant wanting to lease your property and your Heads of Terms are agreed.  What next?

Unless you are leasing the whole of your building you will want to define exactly what areas are being let and what areas (if any) you are granting access rights over. A correctly drawn up plan referred to, and attached to the lease, will achieve this.  In some cases your plan will need to be Land Registry compliant.

When is a Land Registry-compliant plan needed?

  1. New leases exceeding 7 years: Any new lease granted for a term of more than seven years must be registered with the Land Registry and, in almost all cases, require a compliant plan.
  2. Leases of unregistered land: If you’re leasing land that’s not previously registered, a compliant plan is crucial for establishing its boundaries and enabling registration.
  3. Subdividing a property with multiple leases: When a property is divided into multiple parts with separate leases, a compliant plan showing the specific area being leased is mandatory.

What are the key requirements?

  • Accuracy and scale: The plan must be drawn accurately to a stated scale, typically 1:1250 or 1:500 for urban properties and 1:2500 for rural land. Other scales are acceptable if the property is clearly identifiable. Identify different floor levels (where appropriate). Metric measurements are mandatory.
  • Completeness: The plan must show the entire leased area clearly and continuously, without gaps in the boundary line. Show access drives or pathways if they form part of the property boundaries together with any garage or garden land.
  • Clarity: Boundaries should be easily distinguishable, often denoted by edging or hatching. Key features like buildings, roads, road junctions and other landmarks should be included for reference. Have edgings of a thickness that do not obscure any other detail.
  • Compliance with existing plans: If the property is part of a registered estate with an approved plan, the lease plan must align with it. Verbal descriptions based on the estate plan are not sufficient.
  • Details and labelling: Include important information like the property address, orientation (north point). Clearly label boundaries and show separate parts by suitable plan markings (parking space, dustbin space). Show undefined boundaries accurately and, where necessary, by reference to measurements.
  • Format and signature: The plan should be printed on A3 or A4 paper and signed by the Landlord and the Tenant when executing the Lease.
  • Avoid rejection: the Land Registry will reject applications to register leases:
    • where the extent on the plan cannot be related to the Ordnance Survey map;
    • where the extent on the plan is not clearly defined, such as by edging, colouring or hatching; or
    • where the plan is sufficiently distorted to prevent identification of the extent.

Additional points to consider

  • Complex properties: For intricate buildings or multi-floor spaces, separate plans with larger scales might be necessary to show details clearly.
  • Seeking professional help: While basic lease plans can be self-prepared, complex situations or legal requirements might necessitate consulting a surveyor or conveyancer for expertise.
  • Land Registry guidance: The Land Registry website offers detailed guidance and downloadable resources on plan preparation: https://www.gov.uk/government/publications/land-registry-plans-title-plan

It’s important to note that even if a compliant plan isn’t strictly mandatory, having one can significantly streamline the letting process and prevent potential issues down the line. So, it’s generally advisable to err on the side of caution and include a compliant plan whenever possible.

Follow our Commercial Property Explainer blogs and get completely in the know on commercial leases. And if you need expert legal advice in the meantime, call Katie Miller on 01756 592 884 or email katie.miller@awbclaw.co.uk.

7 March 2024

Further Reading:

The Commercial Lease Explainer: Heads of Terms

Buying property and land? Look at the deeds. Then look at them again.

Leaseholds need management companies. Why?

Gov UK: Land Registry

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