We are seeing that more deals are taking longer to complete. For corporate occupiers in particular, the speed of a transaction often hinges on the preparation and anticipation of traps and hurdles by the parties advisers long before the lease is completed.
These traps and hurdles run from ensuring KYC and structural information is readily available, to agreeing clear and comprehensive Heads of Terms, to identifying potential conflict points such as overseas entity requirements, consents, wayleaves or fit‑out approvals at the outset. By anticipating these issues early and tackling them proactively, occupiers can reduce transactional friction, minimise risk, and progress to completion with far greater speed. Below, we will highlight the various areas where delays can be caused (and hopefully, be avoided).
Before the Transaction
KYC/Engagement
- If there is a complex corporate structure, the occupier should have all information (structure chart etc.) readily available to help the risk team understand who the Ultimate Beneficial Owner is and know whose identity in the organisation needs to be verified.
- Both agents and lawyers need KYC to be signed off. The agent team should start getting this information together as soon as they are involved, and before lawyers are instructed.
Heads of terms
- These should be clear and concise, setting out precisely the commercially agreed terms before finally agreeing heads of terms, an occupier should send these to their lawyer to check for any legal issues.
- Make sure that both the Landlord and the Tenant agree the heads of terms and only one agreed set is circulated at the beginning to avoid parties working from different versions.
Overseas Entities
- Check whether any of the parties involved are Overseas Entities (incorporated in a jurisdiction outside the United Kingdom) at the start. If they are, you need to check if they are registered on the Overseas Entity register at Companies House. If they are not registered they must be registered at once. Failure to do so will delay the deal.
Option letter
- If either party is an Overseas Entity, they will need to provide an opinion letter from a lawyer from that overseas jurisdiction, addressed to the other party. Get details of the lawyer who is going to be used and make sure they are ready and understand what has to be done to provide the opinion letter as this can take time. The sooner it is identified, the quicker an overseas lawyer can be instructed to prepare the opinion letter.
Consents
- Consents are often needed for leases. Typically these will be superior landlord’s consents but also mortgagee/bank consents. Make sure that these consents are applied for at the start of the deal so any superior landlord/mortgagee/bank can be dealt with in good time.
Wayleave
As wayleaves are tripartite, and involve an IT provider, it can be a notoriously slow process. Make sure the wayleave issue is raised as soon as possible with all parties to avoid delays in the wayleave delaying the tenant’s ability to operate.
- Check in advance if a wayleave is required for fibre optic cabling and if a client even needs it (as there might already be fibre optic cabling in place).
- Check if the occupier’s IT team have been alerted to the need for fibre optic cabling. Check what provider they will use – COLT/Virgin/Openreach.
- Check what the landlord’s procedures are for wayleaves – often different landlords’ have different approval processes for wayleaves.
Fit-out
- If alterations to the premises are required, plans and specifications should be prepared and submitted to the Landlord as soon as possible. Provide the contractor’s details to the Landlord’s professional team and allow them to agree all technical issues relating to the fit-out.
- If the Landlord is managing the fit-out, occupiers should ensure early on that they have the ability to approve the fit-out.
- Get the tenant’s fit-out contractor details and provide them to the landlord so all technical queries about the fit-out can be sorted out between the tenant’s contractor and the landlord’s technical team directly.
Tax issues
- Make sure the Stamp Duty liability (if any) is known in advance so it doesn’t come as a shock further down the line.
- Find out if VAT is payable on the rent and if the occupier can recover the VAT. This is something worth asking early as VAT can make a significant difference to the rental sums.
- Explore whether there are any other tax considerations.
Financial contributions
- If the landlord is making any capital contributions (i.e. floor boxes etc.), you will want to know this promptly so it can be documented in a side letter supplemental to the lease.
- Occupiers need to provide a VAT invoice to the landlord to receive any contributions. Have this prepared early so as to not cause delays in receipt.
During the transaction:
Communication
- Regular communication is crucial in ensuring continued momentum. Phone calls or meetings can help to cover multiple issues at one time vs floods of emails which can get lost.
- It is important to get clarity on expectations/timelines as both help to give direction.
- Agree who will be the main point of contact and the individual giving instructions at the occupier entity.
Due diligence
- The landlord’s advisers should make sure that all due diligence papers/documents are available immediately to save time at the beginning.
- The landlord’s advisers should start preparing due diligence and occupiers should ask for asbestos surveys, fire risk assessment, registered title, insurance documents, EPC, electrical/gas safety papers, replies to standard enquiries and planning information.
- Red flags should be reported on as and when they come up rather than waiting too close to exchange/completion when the report is provided.
Agent involvement
- The agents should keep on top of what stage of the process everyone is at. They should keep in touch regularly and raise questions directly with either party as this can yield a quicker response than going through solicitors.
- Consider setting up a weekly Teams call for the occupier and its advisers so all issues can be coordinated and anticipated and ongoing tasks monitored.
Conclusion
If the key issues are addressed at the outset and communication is clear and timely throughout the process, corporate occupiers can ensure their transactions progress smoothly and with reduced delay. A structured, proactive approach remains the most reliable route to an efficient and successful lease completion.
