Landlords’ Pre-Completion Prompt Sheet: 12 Questions for Your Solicitor

UK Commercial Lease Completion Checklist for Landlords

Completion is the day the money clears, the lease is dated, and the tenant gets the keys. Your solicitor is U.K. legal counsel who runs title, consents, tax, and registration so the lease can be enforced and traded. A commercial lease is the contract that gives the tenant occupational rights for rent and turns your asset plan into cash flow.

This practical checklist is for landlords completing a U.K. commercial lease or agreement for lease. It focuses on risk controls and deliverables that protect value at completion and in year one. It does not cover residential tenancies or asset sales, except where tax and registration intersect with completion.

Title capacity and consents: confirm power to grant and enforce

Start by making title capacity clear in plain terms. Confirm that freehold vs leasehold rights support the proposed underlease, that user and alienation provisions align, and that the plan pins down the demise without doubt. If the title is charged, line up lender consent and the precise form of any required certificate or restriction compliance. If there is a superior landlord, secure the license to underlet with fee caps and simultaneous completion mechanics.

Run the priority search and keep it live through completion using OS1 or OS2 in England and Wales. Ensure completion and registration fit within the 30 business day priority window so nothing jumps the queue at HM Land Registry. Reserve rights for estate management, inspections, and future development, including oversail, scaffolding, access to services, and sustainability upgrades. Confirm board approvals and execution authority for every party and any attorney.

Deliverables to see before dating include lender consent, superior license, restriction certificates, a registration-ready plan for leases over seven years, and any legal opinions needed for overseas counterparties. As an added safeguard, have your solicitor run a quick audit against any known title defects that commonly derail registrations.

Statutory and regulatory: lawful to let on day one

Two regulatory regimes often trip deals at the gate: energy efficiency and building and fire safety. Address them early to prevent last-minute delays and reputational issues.

Energy performance must meet Minimum Energy Efficiency Standards. Check the EPC and confirm you are not letting a sub-standard property, generally F or G. If you rely on an exemption, require evidence and the PRS Exemptions Register entry with dates. Bake this into conditions precedent and keep a copy in the closing pack.

Building safety is especially relevant for higher-risk buildings. Confirm the Accountable Person, confirm building registration where required, and ensure your lease allows access, data sharing, and cost recovery as permitted by law. For fire safety in mixed-use assets and common parts, confirm the latest fire risk assessment, door checks, and signage. For tenant fit-out, provide asbestos registers, completion certificates for landlord works, and clear Construction Design and Management Regulations 2015 dutyholder allocation.

For completeness, consider linking the above to your compliance handbook. An internal memo that maps lease obligations to items in your compliance calendar can reduce miss risk in year one.

Identity, sanctions, and the Register of Overseas Entities

Tenant identity and capacity drive enforceability. Run KYC and sanctions screening on the tenant and guarantor. Where the corporate footprint touches higher-risk jurisdictions, add representations and notification covenants on sanctions, export controls, and anti-money laundering enforcement. If the tenant or guarantor is an overseas entity taking a registrable lease, require a valid Register of Overseas Entities ID and verification numbers before dating. Without them, HM Land Registry will not register. For charities, LLPs, and overseas entities, confirm legal capacity and execution method.

Mechanics to include are a completion condition tied to delivery of ROE credentials and all superior consents. Collect certified identity documents for notices setup and keep them in your closing pack. Where the tenant is in a group structure, confirm the vehicle aligns with your financing and tax plan and that the SPV at Companies House is properly constituted.

VAT, SDLT, and TOGC: tax setup and cash impact

Set tax treatment before drafting rent clauses. Confirm whether you have opted to tax. If the deal qualifies as a transfer of a going concern, verify the conditions on both sides to avoid VAT on the price. Make the lease clear on VAT exclusivity and ensure rent invoices match the tax position.

Model the tenant’s Stamp Duty Land Tax on leases based on term, rent, and premium. SDLT is due within 14 days of the effective date. If registration depends on the tenant’s SDLT submission, require filing evidence in your completion checklist. If capital allowances matter, put the section 198 election terms into the documents early to avoid leakage. For background or training, this explainer on transfer taxes and stamp duties helps frame the cash impact of timing and structure.

Security package: what actually secures the covenant

Choose the mix, whether deposit, guarantee, or letter of credit, based on credit analysis. For deposits, use a deed that creates a first-ranking charge with clear drawdown and top-up terms. If the deposit sits with the tenant’s bank, get bank acknowledgment and control to cut off set-off risk. For guarantees, verify capacity and approvals, comply with Companies Act execution, add information undertakings, and include change-of-control notices. Use authorized guarantee agreements only within the Landlord and Tenant Covenants Act 1995 framework. For letters of credit, select a strong bank, UCP600 terms, evergreen renewal, and replacement triggers 60 to 90 days before expiry. Hard stops are a weak guarantor without compensating security and a deposit without perfected security.

Completion mechanics: signatures and deliverables

Execution is where many deals stumble. Use Mercury compliant virtual signing. For companies, confirm two authorized signatories or director plus witness. Do not date until all conditions are met, including consents, EPC and MEES evidence, insurance confirmations, security instruments, and initial funds.

Assemble one closing pack with the executed lease and plans, rent deposit deed with funds received, guarantee, any letter of credit and bank acknowledgment, superior landlord license, lender consent, EPC, fire risk and asbestos acknowledgments, insurance schedule and loss-of-rent confirmation, direct debit mandate, initial rent and VAT receipt, ROE credentials, SDLT evidence where needed for registration, and any Companies House filings for your SPV. If you want a simple belt-and-suspenders step, run a pre-completion audit that tests every deed execution block and witness statement against Companies Act requirements.

Rent, indexation, and review: match the model to the paper

Base rent and commencement must tie to access and fit-out dates. Link rent-free periods or capital contributions to actual possession and include a simple dispute route on practical completion. For indexation, name the exact CPI or RPI series, base month, review date, and cap or collar. Include a worked example and a fallback if the index changes. For open-market reviews, set clear assumptions and disregards, appointment mechanics for the surveyor, and payment-on-account rules. For turnover rent, set reporting obligations, EPOS integration, audit rights, and rules for online sales and click-and-collect. Include pro forma certificates and audit adjustments. If you need context on valuation drivers, this overview of market rent vs in place rent is a helpful refresher.

Alterations, fit-out, and works: allocate timing and delivery risk

In an agreement for lease, attach a specification, approvals timetable, collateral warranties, and a longstop with defined remedies. Pre-price liquidated damages or rent-free extensions to keep incentives aligned. For tenant works, set standards, approvals, CDM compliance, and contractor insurance. Allocate planning, listed building consent, building regulations, and highways licenses to the correct party. For shopfronts and signage, condition rent commencement on approvals if this is critical to trading. Define practical completion with an independent certifier and only add snagging retainers if someone can administer them.

Use, planning, and exclusivity: enable trade and keep flexibility

Confirm the permitted use aligns with the Use Classes Order and any planning conditions, including hours and delivery constraints. Make compliance a tenant obligation. If you grant exclusivity, confine it to a product list, carve out existing tenants and digital channels, and define measured remedies you can enforce. Draft nuisance and intensity-of-use controls to protect building systems and other occupiers. Where relevant, include floor loading, odor, and hours limits, and confirm any needed easements and access rights are secured on title.

Alienation, change of control, and group structuring: preserve covenant

Set assignment to require consent not to be unreasonably withheld or delayed, with tests for financial strength, no arrears, and AGA where the 1995 Act allows. Ban part assignments. For underletting, set conditions on whole versus part, minimum rent, no reverse premiums, consistent user, and service charge alignment. Treat certain changes of control as assignments requiring consent, while carving out intra-group moves if the covenant remains and a parent guarantee stays in place. Define group by Companies Act control at the relevant date. Permit desk sharing with named group companies on a revocable basis without creating security or pre-emption rights. Prohibit tenant charges over the lease unless you approve and get direct agreements and cure rights.

Insurance, damage, and business interruption: fund the bad day

In multi-let assets, the landlord insures the building for reinstatement value, including terrorism cover via Pool Re if available. The tenant insures contents and business interruption. Present a fair risk picture to insurers under the Insurance Act 2015 and collect tenant data you need for renewals. Align rent suspension with insured and uninsured risks. For uninsured damage, give either party a termination right if reinstatement will not happen within a set period. For insured damage, apply proceeds to reinstatement with timetables and obligations. Match loss-of-rent cover to your rent review or indexation profile to avoid gaps, and encourage tenant BI cover of 24 to 36 months for rent and service charge exposure.

Post-completion: registration, notices, and reporting

Leases over seven years must be registered. Require the tenant to file promptly and deliver an official copy by a fixed date. Ensure lease-driven restrictions are entered on your title and that your priority period does not lapse. Confirm the tenant files SDLT within 14 days and, if registration depends on it, hold back agreed deliverables until you see submission evidence. For better planning and handoffs, track the exchange to completion timeline milestones and the Land Registry backlog in your close tracker.

Populate notices clauses with correct addresses and emails for landlord, tenant, and guarantor. Secure a U.K. process agent for overseas parties. Issue the tenant handbook and service charge budget. If rent is turnover linked or ESG linked, switch on data sharing and audit packs with clear templates. For overseas entities, diarize annual ROE updates.

Economics and fee stack: plan the spend

Legal costs: Landlord’s legal costs are usually the landlord’s cost. Some markets permit the tenant to pay reasonable costs for licenses to assign or underlet. Cap them if possible.
Consent fees: Lender and superior landlord consent fees vary. Get quotes early and cap recoveries where market practice supports it.
Taxes: VAT applies if you have opted. SDLT is the tenant’s burden. Confirm VAT treatment of rent deposits and interest.
Insurance: Building insurance sits in the service charge. Show terrorism costs transparently and revalue regularly to avoid underinsurance.
Technical: Fire safety updates, EPC assessments, and MEES upgrades are landlord costs unless recoverable under the service charge. Confirm caps.

Accounting and reporting: landlord focus

For most landlords under IFRS, commercial leases are operating leases. Straight-line base rent across the term, net of rent-free periods and steps. Present service charge as variable consideration. Rent deposits are liabilities, with pass-through interest accounted for if credited to the tenant. Letters of credit sit off balance sheet, but disclose material credit enhancements. For REITs and listed vehicles, show material lease commitments, top tenants by gross annual rent, and concentration or credit risk commentary. If rent is index linked, disclose the index and cap or collar.

Tax checks: high-level safeguards, not advice

For U.K. REITs, confirm rent qualifies as property rental business profits. Channel non-qualifying service income through a taxable subsidiary or treat it via service charge trust mechanics. The U.K. does not withhold on commercial rent. For cross-border groups, confirm treaty positions on other payments and avoid accidental withholding via mischaracterized guarantees. For intra-group leases, support arm’s-length pricing with documentation.

Implementation timeline: assign owners and dates

T–8 to T–6 weeks: Title review, conditions precedent list, MEES and EPC checks, heads of terms finalized, and open lender and superior landlord consent dialogue.
T–6 to T–3 weeks: Negotiate lease, security package, and licenses. Prepare insurance endorsements and data clauses.
T–3 to T–1 weeks: Issue execution versions, signing protocol, and completion undertakings. Deposit funds in escrow. Confirm ROE, EPC, and safety documents.
T–0: Completion, funds, and dating. Mercury compliant packages exchanged.
T+1 to T+4 weeks: SDLT filings, service charge onboarding, and direct debit setup.
T+4 to T+8 weeks: Land Registry application and delivery of official copies. Update title restrictions.
Ongoing: Insurance renewals, BI alignment, ROE updates, and ESG data flows.

Common pitfalls and hard stops

MEES breach: EPC at F or G with no valid exemption. Do not date.
Missing superior consent: If the license is not in agreed form, wait.
Sanctions or ROE gap: Unresolved match or missing ROE ID. Hold until fixed.
Unperfected deposit: No first charge or no bank acknowledgment. Correct it.
Indexation defects: Undefined index series or wrong base month. Repair and test with an example.
Execution errors: Deeds not properly executed. Run a pre-completion audit.

Prompts to send your solicitor today

Title and consents: Confirm power to grant the lease and list every consent or certificate needed to complete and register, with drafts attached.
MEES and EPC: Confirm MEES status, EPC rating, and evidence that letting is lawful on completion or that a valid exemption is registered, with dates.
Safety compliance: Confirm building and fire safety status and that the lease allows inspections, data access, and lawful cost recovery.
KYC and ROE: Confirm KYC and sanctions outcomes and ROE status for tenant and guarantor. Add a completion condition that blocks dating absent valid ROE IDs where required.
Tax analysis: Provide VAT and SDLT analysis, option-to-tax evidence, TOGC status if relevant, and SDLT filing duties and deadlines.
Security package: Provide the full security package, including a perfected rent deposit deed, enforceable guarantee, and any letter of credit with bank acknowledgment.
Signing protocol: Provide Mercury steps, witness requirements, and an escrow plan for third-party consent sequencing.
Rent mechanics: Provide a one-page memo that reconciles drafting to the model: index series, cap or collar, review timetable, and turnover reporting pack if any.
Works schedule: Provide the AFL and works schedule with longstop, remedies, CDM role allocation, and collateral warranties in agreed form.
Alienation alignment: Provide the alienation and change-of-control summary and confirm alignment with the 1995 Act.
Insurance alignment: Provide who insures what, rent suspension triggers, uninsured risks, and Pool Re status.
Post-completion plan: Provide SDLT evidence, Land Registry filing responsibilities, notices addresses, ROE diary dates, and data-sharing onboarding.

Decision rule for sponsors and lenders

Do not date the lease unless legality under MEES, third-party consents, and the security package are locked and evidenced. Those three gates protect enforcement, registration, and cash flow. Economics and fit-out can flex if the documents capture timing relief and remedies. Enforceability and registrability should not.

Closeout pattern for documents and data

Archive the full deal file with index, versions, Q&A, user list, and audit logs. Create a cryptographic hash and fix retention periods. Instruct vendors on deletion at end of term and collect destruction certificates. Apply legal holds where required. As a small upgrade, add QR-coded notice details to the completion schedule so property managers can scan and load correct addresses into systems on day one.

Key Takeaway

Completion certainty comes from three levers: legal power to grant, full third-party consents, and a perfected security package. If those are watertight and your MEES and safety evidence is in the file, everything else is a timing or economics discussion. Build your closing pack to prove enforceability and registrability, and you will protect cash flow from day one.