Heads of Terms Explained: A Business Owner’s Guide to Setting Up a Commercial Lease

Taking on a new commercial lease is a big moment for any business owner. Whether you’re opening a café in Nottingham, expanding your office space, or launching a retail unit, setting up the right lease terms is crucial for your long-term success.

At Bramble & Wagg, our chartered surveyors regularly help tenants navigate the early stages of leasing starting with getting the Heads of Terms right. Here’s what you need to know.

What Are Heads of Terms in a Commercial Lease?

Heads of Terms (also called ‘Letters of Intent’ or ‘Memoranda of Understanding’) set out the main points agreed between you and the landlord before the lease is drawn up.

They are not usually legally binding, but they form the foundation for your formal lease.

A good set of Heads of Terms will clearly set expectations on key issues such as:

• Lease length
• Rent amount and review patterns
• Break clauses (your right to exit early)
• Repair obligations
• Rights to assign or sublet
• Who pays for what (insurance, service charges, etc.)

Why Getting Heads of Terms Right Matters for Tenants

Many tenants underestimate the importance of the Heads of Terms stage.

Yet negotiating favourable terms early makes it much easier to avoid problems later on — and can save thousands of pounds over the life of the lease.

Badly drafted Heads of Terms could leave you exposed to:

• Unfair rent review clauses
• Unlimited repairing obligations
• Service charge surprises
• Limited flexibility if your business needs change

Once the full lease is drafted based on these Heads, it’s harder (and more expensive) to make changes.

Common Mistakes Business Owners Make

We often see tenants fall into similar traps, such as:

• Accepting the landlord’s Heads of Terms without negotiation
• Overlooking repairing obligations (especially ‘full repairing and insuring’ leases)
• Failing to negotiate break clauses or rent-free periods
• Not realising that even non-binding Heads can set the tone for negotiations

A lack of professional advice at this stage can seriously limit your options later.

How a Chartered Surveyor Can Help Negotiate Better Terms

At Bramble & Wagg, we specialise in tenant-side lease advisory services.

Our role includes:

• Reviewing and advising on Heads of Terms
• Highlighting risks or hidden costs
• Negotiating improvements to protect your business
• Working alongside your solicitor to ensure technical and legal risks are covered

Having a chartered surveyor on your side shows the landlord you are serious and professional — strengthening your negotiating position from day one.

Speak to Bramble & Wagg Before Signing Your Next Lease

If you’re considering a new lease for your business in Nottingham, don’t leave the Heads of Terms to chance.

Getting the right advice early is the best investment you can make.

Contact Bramble & Wagg’s lease advisory team today for practical, no-nonsense support tailored to your business goals.