Agreement For Lease Checklist Before Fit-Out Works

Signing up for new premises is exciting, but it can also feel a bit awkward when the space isn't ready yet. Maybe the landlord still needs to finish base-build works, or you need consent to spend thousands on your own fit-out before the lease even starts.

An agreement for lease can be helpful here. It lets you and the landlord lock in the deal now, while making the lease conditional on certain steps happening first.

The catch is that if the agreement is too vague, you could end up paying contractors, ordering equipment or planning an opening date without a clear right to occupy the space. An agreement for lease review before you commit spend can save a lot of stress later.

What Is An Agreement For Lease?

An agreement for lease is a binding contract that says you and the landlord will enter into a lease later, usually once certain conditions have been met.

For commercial premises in England and Wales, it's often used where the property isn't ready for occupation yet. For example, the landlord may need to complete works, obtain planning consent, split a unit, install services or approve your fit-out drawings before the lease starts.

The agreement for lease usually sits alongside several other documents, such as:

• The draft lease, which sets out the long-term terms once the lease begins.
• A specification for landlord works, covering what the landlord must build, install or repair.
• A licence for alterations, if you need permission to carry out your own fit-out works.
• Plans and drawings, showing the premises, access areas, signage zones and fit-out layout.
• A rent deposit deed or guarantee, if the landlord requires extra security.

The agreement is usually signed before the lease. That means you may be legally committed to take the premises even though you don't yet have the keys.

That's why your review shouldn't only ask, is the rent right? It should also ask, what exactly needs to happen before I must take the lease, and what happens if it doesn't?

What Should Your Agreement For Lease Checklist Include?

Your agreement for lease checklist should cover the conditions, works, timing, payment triggers and exit rights before you sign or spend money on the fit-out.

Here are the main points to check.

1. The Parties And Premises

Check the landlord, tenant and any guarantor names are correct. If you're using a limited company, the company name and number should match the Companies House register.

Check the premises are described clearly. A plan should show exactly what you're taking, especially if the unit is being split, extended or carved out of a larger building.

2. Conditions Before The Lease Starts

The agreement should spell out each condition that must be satisfied before lease completion. Common conditions include:

• landlord works reaching practical completion
• planning permission or building control approval
• your fit-out plans being approved
• a licence for alterations being agreed
• utilities, access or services being connected
• vacant possession being available

3. Dates, Longstop Dates And Delay Rights

Make sure there are realistic target dates and a final longstop date. A longstop date is the backstop deadline by which a condition must be met, failing which one or both parties may be able to walk away.

Without a longstop date, you might be stuck waiting for months while still being tied to the deal.

4. Rent And Completion Triggers

Check exactly when rent, service charge and insurance contributions start. This might be:

• the date the lease completes
• the date you get access
• the date landlord works are certified as complete
• the end of a rent-free fit-out period

Those dates can be very different in practice, so the wording matters.

How Do Completion Triggers Work In A Commercial Fit-Out Lease Agreement?

Completion triggers decide when the lease must be completed, and they can decide when your rent clock starts.

In a fit-out scenario, the most common trigger is practical completion of the landlord's works. That usually means the works are complete enough for the premises to be used, apart from minor defects or snagging.

The agreement should say who certifies practical completion. It might be the landlord's surveyor, an independent architect or another agreed professional. If only the landlord decides, you may have less control if you disagree that the space is ready.

Try to make the trigger as objective as possible. For example, instead of saying the lease starts when the landlord considers the premises ready, the agreement could require:

• completion of the agreed works specification
• building control sign-off where required
• confirmation that essential services are connected
• safe access for your contractors and staff
• delivery of any required certificates or warranties

Say Priya is opening a small salon in Manchester. Her agreement for lease says rent starts 10 working days after practical completion of the landlord's works. The landlord's works include installing a new shopfront, hot water system and electrical supply.

The landlord says the works are complete on 1 May, but the hot water system still hasn't been commissioned. If Priya's agreement simply says the landlord can certify completion, she may have to complete the lease and start paying rent before she can trade properly. If the agreement links practical completion to the actual works specification and essential services, Priya has a clearer basis to push back until the premises are genuinely ready for her fit-out.

What Should You Check If The Lease Is Conditional On Works?

If the lease is conditional on works, you should check who does the works, what standard they must meet, who pays, and what happens if the works are late or defective.

This is where many disputes start. A landlord may say they'll provide a shell unit with basic services. You may be assuming the unit will be ready for your cafe, clinic or studio fit-out. Those assumptions need to be written down.

Your works schedule should cover:

• Scope: the exact works the landlord must complete, with drawings, specifications and materials where possible.
• Standards: compliance with planning permission, building regulations and other legal requirements.
• Timing: target dates, inspection dates and the longstop date.
• Access: when your fit-out contractor can enter the premises, and under what conditions.
• Snagging: how defects will be recorded, fixed and signed off.
• Costs: whether costs are included in the rent, charged separately or capped.
• Failure: your rights if the landlord doesn't finish the works on time.

You should also check whether you can claim any losses if the landlord is late. Many landlords exclude liability for your lost profits, contractor stand-down costs or delayed opening costs. You may not be able to negotiate everything, but you need to know the position before you book trades or announce an opening date.

If construction work is involved, the Construction (Design and Management) Regulations 2015 may also be relevant. Depending on the project, duties can sit with clients, designers and contractors. For a small tenant-led fit-out, it's worth making sure your contractor is clear on health and safety responsibilities before anyone starts work on site.

Do You Need A Licence For Alterations Before Fit-Out Works?

Yes, if your lease or draft lease requires landlord consent for alterations, you should usually have a licence for alterations before starting fit-out works.

A tenant fit-out agreement and a licence for alterations are closely connected, but they aren't always the same thing. The agreement for lease may give you early access and set the conditions for taking the lease. The licence for alterations usually gives detailed consent for the actual works you want to carry out.

A licence for alterations commonly covers:

• approved plans, drawings and specifications
• working hours and site access rules
• insurance requirements for your contractors
• health and safety obligations
• requirements to use qualified contractors
• reinstatement at the end of the lease
• sign-off once the works are complete

Don't assume that landlord approval of your heads of terms, or even a heads of agreement, means you're free to start works. Heads of terms are often not enough. Email approval can also be risky if the lease requires formal written consent.

Check whether your works need planning permission, building regulations approval or other consents. For example, signage, extraction systems, shopfront changes, accessibility works and changes of use can all raise separate issues depending on the property and local authority requirements.

If your business is in a regulated sector, there may be industry-specific approvals too. A food business may need suitable extraction, hygiene-friendly surfaces and local authority registration. A childcare setting, clinic or fitness studio may have extra layout, access or safety requirements.

The safer position is simple: don't pay a fit-out contractor a large deposit until your consent position is clear.

How Should Rent-Free Periods, Deposits And Early Access Be Written?

These terms should be written with exact dates, triggers and payment responsibilities, because small wording differences can change your cashflow dramatically.

A rent-free period is often offered to cover your fit-out period. The key question is when it starts. If the rent-free period starts on completion of the lease, but you can't access the premises until later, you may lose part of the benefit. If it starts on the date you get access, that may be more helpful.

Check whether the rent-free period applies to:

• annual rent only
• service charge
• insurance rent
• utilities
• business rates

Commercial leases often treat these separately. You might have no base rent for 3 months but still need to pay service charge, insurance and utilities from day one.

If you pay a rent deposit, the rent deposit deed should say when the deposit is paid, where it's held, when it can be used and when it must be returned. If your company is new, the landlord may also ask for a personal guarantee. Take that seriously, because it can make you personally responsible if the company doesn't pay.

Early access is another common issue. If you're allowed in before the lease starts, the agreement should cover:

• who can enter the premises
• what works can be done
• whether you pay an access fee
• who is responsible for damage
• insurance and contractor requirements
• whether early access can be withdrawn

For example, if your annual rent is 48,000 pounds and you negotiate a 3 month rent-free period, that's 12,000 pounds of base rent relief. But if the period starts before you can access the premises, or if you still pay a 900 pounds monthly service charge and insurance, your real cash saving is lower. That doesn't mean the deal is bad. It just means you should budget using the actual wording, not the headline incentive.

What Clauses Should Your Lawyer Review Before You Sign?

Your lawyer should review the agreement for lease, the draft lease and the fit-out documents together, because one document can quietly change another.

Templates and standard forms can be useful starting points, but a commercial lease review often catches project-specific details. Fit-out arrangements work best when they're tailored to the premises, the landlord works and your opening plan.

As a practical fill-in outline, your agreement for lease should usually address the following sections. This isn't a finished legal document, but it can help you check what's missing before a lawyer tailors it.

1. Parties: write the correct landlord, tenant and guarantor details, including company numbers where relevant.
2. Premises: attach clear plans showing the exact unit, access routes and any shared areas.
3. Lease Terms: summarise the agreed rent, term, break rights, permitted use and rent review terms.
4. Conditions: list every condition that must be met before the lease is completed.
5. Landlord Works: attach a detailed specification, timing plan and sign-off process.
6. Tenant Fit-Out: set out what works you can carry out, when access starts and what consent is needed.
7. Completion Trigger: define exactly what event forces completion of the lease.
8. Longstop Date: state the final deadline and who can terminate if it's missed.
9. Payments: cover deposits, contributions, rent-free periods, service charge and insurance.
10. Documents On Completion: list the lease, licence for alterations, rent deposit deed, guarantee and any certificates.
11. Disputes: include a practical way to resolve disagreements about completion, defects or delays.
12. Costs: say who pays legal, surveyor, consent and Land Registry costs where relevant.

Also check whether the lease will be inside or outside the security of tenure protections in the Landlord and Tenant Act 1954. If it's contracted out, the landlord must follow the statutory warning notice and declaration process before you're legally bound. This is a key point because it affects whether you may have a right to renew at the end of the term.

Key Takeaways

• An agreement for lease can protect your deal, but it can also commit you before the premises are ready.
• Your checklist should focus on conditions, works, access, completion triggers, longstop dates and payment timing.
• Don't start major fit-out works unless your landlord consent and licence for alterations position is clear.
• Rent-free periods, deposits and early access terms need precise wording so your cashflow matches your plan.
• Review the agreement for lease, draft lease and fit-out documents together, not as separate paperwork.
• If the lease is contracted out of the Landlord and Tenant Act 1954, make sure the correct notice and declaration process is followed before you're bound.

If you'd like help with reviewing your agreement for lease, checking your fit-out consent documents, or negotiating completion triggers and landlord works, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.