Master Lease With Option To Purchase Template for England and Wales

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Key Requirements PROMPT example:

Master Lease With Option To Purchase

"I need a Master Lease With Option To Purchase for a commercial warehouse property in Manchester, with a 5-year initial lease term starting March 2025 and an option to purchase at £2.5M exercisable after year 3."

Document background
The Master Lease With Option To Purchase is a sophisticated legal instrument used when parties wish to combine traditional leasing arrangements with a future purchase opportunity. This document, governed by English and Welsh law, provides flexibility for tenants who may want to eventually own the property but prefer or need to lease initially. It includes comprehensive terms covering both the lease period (rent, maintenance, insurance) and the purchase option (price, exercise period, conditions). The agreement is particularly useful for businesses testing a location before committing to purchase, or for tenants building up capital for an eventual purchase.
Suggested Sections

1. 1. Parties: Identification of lessor and lessee with full legal names and addresses

2. 2. Background: Context of the agreement and brief description of the property

3. 3. Definitions: Key terms used throughout the agreement including defined terms from relevant legislation

4. 4. Demise: Formal grant of the lease and description of the property

5. 5. Term and Rent: Duration of lease and rent payment terms

6. 6. Option to Purchase: Terms and conditions of purchase option, including price and exercise period

7. 7. Tenant Covenants: Obligations of the tenant including maintenance, use, and insurance

8. 8. Landlord Covenants: Obligations of the landlord including quiet enjoyment and insurance

9. 9. Assignment and Underletting: Provisions governing the transfer of lease or subletting of property

10. 10. Termination: Events of default and termination procedures

Optional Sections

1. Service Charge Provisions: Required for multi-let properties or where services are provided by landlord

2. Break Clause: Early termination provisions for either or both parties

3. Rent Review: Mechanism for adjusting rent during term, typically for longer leases

4. Green Lease Provisions: Environmental performance and sustainability obligations

5. VAT Elections: Provisions relating to VAT treatment of the property and rent

Suggested Schedules

1. Schedule 1: Property Description: Detailed description of the property including plans and boundaries

2. Schedule 2: Rights Granted: Specific rights granted to tenant (e.g., parking, access, utilities)

3. Schedule 3: Rights Reserved: Rights retained by landlord and access requirements

4. Schedule 4: Service Charge: Detailed service charge calculation and included services if applicable

5. Schedule 5: Purchase Option Details: Detailed mechanism for exercising purchase option including valuation methods

6. Schedule 6: Condition Schedule: Schedule of condition at lease commencement

7. Schedule 7: Guarantee Provisions: Form of guarantee if required from third party guarantor

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Industries

Law of Property Act 1925: Fundamental legislation defining legal estates and interests in land, requirements for creation of leases, and rules regarding assignments and transfers

Landlord and Tenant Act 1954: Governs security of tenure provisions, business tenancy regulations, and renewal/termination procedures

Landlord and Tenant Act 1985: Covers landlord's repairing obligations, service charge requirements, and fitness for human habitation standards

Landlord and Tenant Act 1987: Addresses right of first refusal provisions and service charge consultation requirements

Law of Property (Miscellaneous Provisions) Act 1989: Sets out requirements for contracts to be in writing and formal execution requirements

Consumer Rights Act 2015: Relevant for residential properties, covering unfair terms provisions and consumer protection measures

Housing Act 1988: Governs assured and assured shorthold tenancies and grounds for possession in residential contexts

Commonhold and Leasehold Reform Act 2002: Details service charge provisions and management issues for leasehold properties

Land Registration Act 2002: Specifies registration requirements and priority of interests in land

RICS Guidelines: Professional standards and guidelines set by the Royal Institution of Chartered Surveyors

Local Authority Requirements: Specific regulations and requirements set by relevant local governing bodies

Planning Regulations: General planning law and regulations affecting property use and development

Building Regulations: Standards and requirements for building works and property maintenance

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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