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When leases are negotiated it is not uncommon for tenants to have certain demands, especially in the context of retail leases. For example retail tenants will often (whether or not they are household names) have a number of standard requirements which will have to be met before they will take the lease. Landlords may prefer to record such requirements in a document that need not be lodged at the Land Registry (normally because the terms are confidential and neither side wants them in the public domain and also because the intention is that they should not benefit any other party, for example if the lease is later transferred in the future). The answer therefore is that on occasions side letters will be useful and are not uncommon.
If Side Letters are used what are the main things to watch out for?
Care needs to be taken by Landlords when agreeing a side letter. The main points to note briefly are:-
The Moral of the Story?
If negotiating a side letter it is always prudent to consult a solicitor and only to agree heads of terms subject to approval by solicitors.
Should you have any queries or if you are considering whether to agree a side letter a lease and need advice with regard to heads of terms please contact Carlo Sereni (Head of Commercial Property) on 01743 285861 or by email to: firstname.lastname@example.org
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