One of the first points to check in a lease is to ensure that the lease includes the correct permitted use. A buyer’s lawyer should check to see that use under class C:2 of the Town and Country Planning Act is obtained. This should be reflected in the lease as it can cause issues when coming to sell, as buyers and lenders will expect the permitted use to be correct.

Operators can find that they are required to take on service users and be faced with service users moving on at short notice. When negotiating terms for a lease, a tenant could negotiate a tenant only break clause to terminate the lease if for example any contracts for care are terminated. We have seen rolling break clauses agreed with termination on three months’ notice, but this will be a point for negotiation with the landlord.

The reality of running a children’s home or supported living accommodation can mean that that the property is subject to increased wear and tear. As a tenant, staying on top of your repair obligations is key. To minimise the risk of taking on greater repair liabilities than you might want to, look to limit the repair clause in leases to a schedule of condition. This is a schedule of photographs that will be annexed to the lease, evidencing the condition of the property as at the start of the term. The repair clause should then state that the tenant will not be liable to put the property in any better condition than as evidenced in the schedule.

Depending on where an operator is, be it at the start of their trading life, or whether looking to exit, can have an affect on the security that a landlord will require when taking on a new lease. If a newer company (without a proven track record of good financials) is looking to take on a lease, they may be required to personally guarantee the obligations of a tenant or provide a rent deposit deed. When looking to sell, you should engage your landlord as soon as possible to confirm their requirements for replacing any guarantors, or deal with returning and replacing any rent deposit. The same also applies for asset sales where leases need to be assigned or share sales where there is a change of control provision in the lease.