A lease is a contract giving a right to exclusively use something, be it premises (usually the whole or part of a building), a computer programme, or even a radio frequency.

Where the lease is for premises, the person providing the premises is called the landlord or the lessor and the person occupying under the lease is called the tenant or lessee.

Leases were originally created by what is known as common law (i.e. custom and practice) and are still regulated somewhat by common law but also by statutes (i.e. laws made by Parliament).

The most basic requirements for a lease are: a landlord, a tenant, identifiable premises (usually a building or part of a building), a fixed period of occupation (known as a term) and a rent (i.e. a sum of money payable by the tenant to the landlord).

If there are no other parts to the lease, the provisions of common law and statute step in to complete missing details. However, such provisions may have undesirable consequences for either landlord, or tenant, or both. It is good practice for a lease to contain many other detailed provisions in order to fully regulate the relationship between landlord and tenant. Such provisions of a lease often depend on the relative bargaining power of the parties.

It is usually perceived that tenants who occupy residences under a lease have less bargaining power than landlords. Consequently, for social and other reasons, no matter what the lease may state statute law often intervenes.

Statute law intervenes much less with respect to leases of non-residential premises, which are most often commercial leases. In the case of commercial leases, there is a wide assumption that landlords and tenants have more equal bargaining power and are more likely to obtain an attorney's advice.

As a result, commercial tenants enjoy less statutory protection and commercial leases should be most carefully considered.

The usual rule in commercial cases is that if a lease is silent on any point, the common law (built up over hundreds of years) fills the void. As the common law may be a few centuries out of date, there could be undesirable consequences, as patterns of occupancy have changed substantially e.g. with multi-occupied buildings enjoying common air conditioning and elevators etc. Uncertainty is often an enemy of commerce, yet certainty can so easily be written into a lease.

In a multi-occupied building, the identity of the premises should be carefully defined so that someone (be it the landlord, the tenant, or another tenant) has responsibility for all parts of the building and each party's liability is defined.

What services (if any) the landlord is to provide and how these are to be paid for now and in the longer term (i.e. if included in the rent or if there is a service charge), should be spelled out. Often a service charge is variable – for example, because the price of electricity provided to common areas rises and falls.

If the tenant requires any rights of way across common parts, or a right to use parking, bathroom and kitchen facilities, that should be included in the lease.

The landlord may need to reserve certain rights over the premises for the landlord or for third parties e.g. fire escapes and access to repair common services or services running to other parts of a building.

In addition to the cost of services being variable, the cost of insurance is also likely to be variable. If a landlord is recovering the cost of insurance from a tenant, the lease should allow for premium increases.

It is rare for a building to be damaged to the extent of being unusable, but a well written lease provides for rent reductions and break rights should that be the case.

A break right (known as surrender) allows either the landlord, or the tenant, or both to terminate the lease in defined circumstances such as when a building is damaged or inaccessible.

Break rights in other instances are usually resisted by a landlord desiring to continuously receive rent, without having to seek a new tenant during the lease period.

Even over a short time period needs can change and so an ability (especially if there is no tenant break right) to transfer the lease (known as assignment), or to sublet all or part of the premises to another party, is useful to a tenant. A right to share premises with an affiliate gives a tenant further flexibility.

Securing a right to a new lease period when the current period ends is often important to a tenant.

Renewal rights should include detail relating to how long the renewal is for and how the new rent and service charge etc. shall be calculated. A renewal right can be important, especially in the event of expensive tenant fit out works, the cost of which is not being compensated for by the landlord.

Often, a lease makes the tenant responsible for putting the premises into a very good condition at the end of a lease period. As always, wording should be carefully checked before signing.

In the present market, landlords may be more willing than usual to be flexible on certain lease aspects, particularly if the tenant is not pushing too hard on the rent. However, parties should bear in mind that nearly every word included or omitted from a lease can have a cost or potential cost impact.

Attorney Neil Molyneux is a member of the Property Practice Group of Appleby. A copy of this column is available on the firm's web site at www.applebyglobal.com.

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.