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Download a free tenancy agreement template. Learn what to include, common drafting mistakes, and how to manage tenancy agreements efficiently at scale.
Create and manage tenancy agreements more efficiently with this free template, enabling businesses to establish clear rental terms and conditions.
With the rise of commercial spaces and a hybrid working world often requiring businesses to rent smaller premises than before, tenancy agreements have become a staple in the corporate world.
But what are they, who should use one and how can you draft one?
A tenancy agreement governs the relationship between a landlord and a tenant. Also known as a lease agreement in the US, it sets out what is being let, for how long, at what rent, and who is responsible for what.
Get the terms right and both parties have a clear, workable framework for the duration of the letting.
Get them wrong, and the gaps tend to surface at the worst possible moments: a dispute about dilapidations, a break clause that cannot be exercised, or a notice that turns out to be invalid.
When you should use a tenancy agreement depends on your reason for hiring a space. Some of the most common reasons are:
The content will vary depending on the type of letting and the jurisdiction, but most well-drafted tenancy agreements address the following:
Full legal names for landlord and tenant, the registered or correspondence address of each, and a precise description of the property being let.
For commercial lettings, this should include any fixtures, fittings, shared facilities, car parking, or storage that form part of the letting.
You should also attach a floor plan or property schedule where the boundaries might otherwise be ambiguous.
The start date, contract duration, and how the tenancy ends, are all important components of a tenancy agreement template.
For fixed-term residential tenancies, you'll need to be clear about what happens at the end of the fixed term: does it become periodic, does it end automatically, or does it require notice?
For commercial lettings, include any initial rent-free period (common where a tenant is fitting out) and note the date from which rent starts to run, which may differ from the date of occupation.
A break clause gives one or both parties the right to end the tenancy before the fixed term expires.
In commercial lettings, break clauses are common and significant, but they are only as useful as the conditions attached to them. Courts in England and Wales have repeatedly found against tenants who failed to satisfy break conditions precisely, even where the failure was minor: outstanding rent arrears of a trivial sum, failure to give up vacant possession of every part of the premises, or a technical defect in the notice itself.
If a break clause is included, the conditions must be clearly defined, achievable, and reviewed carefully by both parties before execution.
The amount, frequency, and method of payment are all important details for a tenancy agreement to run smoothly.
For commercial lettings, you'll want to include a rent review mechanism if the term is longer than a few years: how often rent can be reviewed, the basis (open market, RPI, fixed uplift), and whether reviews are upward-only or upward-and-downward.
More on contract payment terms.
In commercial lettings, it is common for landlords to offer an initial rent-free period to allow a tenant to fit out the premises, or a cash contribution toward fit-out costs.
However, these allowances should be documented clearly in the agreement, including what happens to any unamortised incentive if the tenant breaks or assigns the lease early. Without this detail, it's difficult to decipher what was actually agreed.
The amount of any security deposit, the conditions under which it may be retained, and where it will be held. For residential tenancies in England and Wales, the deposit must go into a government-approved scheme.
For commercial lettings, there is no equivalent requirement, but the terms should still be explicit. Some commercial landlords take a rent deposit deed rather than a standard deposit clause; if that is the arrangement, it will typically be documented separately.
It is always important for a tenancy agreement to specify how a premises is to be used, and for what purpose, particularly if you're leasing a commercial premise.
Just remember: a use clause that is too narrow limits the tenant's flexibility; one that is too broad may expose the landlord to uses they did not intend to permit.
Breaching a use clause can entitle the landlord to forfeit the lease, so the tenant should check that the permitted use matches their actual and anticipated business activities.
Next, you'll want your tenancy agreement to outline who is responsible for which repairs, and to what standard they must be carried out.
For commercial lettings, the allocation of repair responsibility is negotiable. A full repairing and insuring lease places the full cost of repair on the tenant, including inheriting pre-existing disrepair unless the position is limited by a schedule of condition. This is a material financial obligation that tenants often underestimate.
For commercial lettings, agreeing and attaching a schedule of condition at the start of the tenancy is one of the most practical steps a tenant can take.
It records the state of the property at the point of occupation and limits the tenant's reinstatement obligation to returning the property to that condition rather than a higher standard.
Without it, disputes about the state of the property at the end of the term are significantly harder to resolve in the tenant's favour.
In multi-tenanted commercial buildings, service charges can be substantial. The tenant should understand what costs are included, seek a cap on year-on-year increases, and negotiate audit rights so they can verify how costs are calculated.
Surprises on service charges are one of the most common sources of landlord-tenant friction in commercial lettings, so it's worth documenting these clearly and in detail within your tenancy agreement to begin with.
Whether the tenant may carry out physical works to the premises, under what conditions (typically landlord's consent, not to be unreasonably withheld), and whether they must reinstate at the end of the term.
This should be agreed upfront: tenants who carry out alterations without addressing the reinstatement position can face significant unexpected costs at the end of the contract.
Consider whether or not the tenant may assign their interest to a third party or sublet part of the premises.
Landlords typically require consent todothis. The standard position (consent not to be unreasonably withheld or delayed) is broadly accepted, but for longer leases tenants often seek to define specific scenarios where consent will be treated as given automatically.
For subletting specifically, the sublease agreement template covers the additional considerations involved.
All agreements come to an end eventually. But your tenancy agreement should also outline the grounds on which the tenancy can be ended before its natural expiry, the notice required, and the procedure for discharge or termination of contract.
For residential tenancies, the grounds and notice periods are largely statutory and cannot be varied by agreement.
For commercial tenancies, a forfeiture clause gives the landlord the right to retake possession on certain events, including non-payment of rent or breach of covenant. Forfeiture is a significant remedy and the procedure around it is technical.
Finally, your tenancy agreement should clearly state the jurisdiction whose law governs the agreement, and the mechanism for resolving disputes.
Mediation or arbitration clauses are increasingly common in commercial leases as an alternative to litigation.
A break clause with conditions that cannot be cleanly satisfied in practice is a break clause that may not work when needed.
"Vacant possession" is a common condition that has generated substantial case law: tenants have lost their right to break because of items left on the premises, fixtures not removed, or a subtenant still in occupation.
Any conditions attached to a break should be reviewed with this risk in mind.
Agreeing a schedule of condition adds time at the outset but saves significantly more at the end of the term.
For any commercial letting where the tenant intends to occupy and use the premises normally, this should be treated as standard rather than optional.
For residential landlords, the consequences of non-compliance with statutory requirements (deposit protection, prescribed information, certificates) can be significant and are not cured by the terms of the agreement itself.
These obligations are jurisdiction-specific and should be confirmed before the tenancy begins, not after a dispute arises.
A property description limited to an address will not resolve disputes about boundaries, included fixtures, or shared access. A floor plan or condition schedule attached to the agreement is not a luxury item.
A fixed rent without a review mechanism protects the tenant in an inflationary environment but erodes value for the landlord over time, and vice versa.
Both parties should consider whether the absence of a review clause is intentional or an oversight. Both are reasonable.
Tenants reviewing a tenancy agreement presented by a landlord will generally focus their attention on the areas that carry the most practical and financial risk over the life of the letting.
Open market rent reviews can result in substantial uplifts, particularly after a long initial period without review. Naturally, this can create some anxiety for tenants looking at long-term leasing.
To combat that, tenants frequently seek upward-and-downward reviews, a cap on any single uplift, or a fixed percentage increase rather than open market.
The achievability of these positions depends on the market and the relative bargaining strength of the parties, but they are standard asks worth considering.
Tenants want a break right they can actually exercise. Landlords want protection against tenants breaking mid-dispute or while in arrears.
The negotiation is usually about the scope and precision of the conditions: removing reinstatement as a condition, limiting the arrears condition to formal rent rather than any sum claimed, and ensuring the notice requirements are unambiguous.
Tenants on some leases bear the full cost of repair, including potentially significant inheriting disrepair.
The schedule of condition is the primary protection here, but tenants may also seek to cap their repair obligations by reference to it and exclude liability for structural or inherent defects.
That's why you'll often see tenancy agreements detail the differences between 'wear and tear' and other defects.
A well-advised tenant will look for a cap on year-on-year service charge increases, a clear definition of what costs are recoverable, and audit rights.
For longer leases, the aggregate service charge cost can rival or exceed the headline rent, so this is not a minor point.
The longer the lease, the more important it is to have meaningful flexibility to assign or sublet if business circumstances change.
Tenants often seek to agree specific scenarios where consent will be deemed given and to define what conditions the landlord may impose on any permitted assignment.
For a more detailed overview of what a thorough contract review process should cover, see Juro's guide to how to review a contract.
For a single property and a single tenant, a largely manual process is workable. The main post-signature task is tracking key dates: rent review triggers, break notice windows, and the end of the fixed term.
But the picture changes quickly for property managers, real estate teams, or businesses operating across multiple locations.
The risks that compound with volume are missed renewal or notice deadlines, inconsistent template versions being used across different properties, and the absence of a central view of what obligations are live and when they fall due.
Rent review dates missed because they were buried in a spreadsheet, break notices served too late because the notice window closed unobserved, and reinstatement disputes compounded by a missing schedule of condition are all problems that stem from fragmented contract management rather than bad drafting.
Placemakr, the US apartment hotel operator, faced exactly this problem. Their commercial team was managing contracts across multiple jurisdictions using twelve separate templates, manually populating agreements from HubSpot data and moving them through Word, DocuSign, and SharePoint in sequence.
After moving to Juro, they consolidated those twelve templates into one using conditional logic tied to location and market data, and gave their commercial team the ability to generate agreements directly from HubSpot. The result was a 50 per cent reduction in time spent on contract creation and management.
For teams managing tenancy agreements alongside other commercial contracts, the functionality that makes this work at scale includes:
If you are managing a growing volume of tenancy agreements and want to see how that works in practice, book a demo with Juro.
You can also read more about how Juro supports property and real estate teams in the guide to real estate contract management software.
Juro is the #1-rated contract platform globally for speed of implementation.
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