Heads of Terms
28 August 2026(2026-Aug: LinkedIn) Details of any transaction ‘subject to contract’ are best outlined in Heads of Terms. Although deals can be agreed verbally, brief details passed to the lawyers to deal with (presupposing parties not into d-i-y), lawyers left to their own devices comes under the heading of ‘high risk’.
In my experience, surveyors tend to separate their role from documentation. But a document doesn’t have to involve lawyers to be legally-binding. For example, memorandum for rent review. My wording, approved by two solicitors, has stood the test of time. I’ve lost count of the number of memos drafted by surveyors for my approval where I’ve ended up drafting the memo myself. I have prepared a gentleman’s agreement and numerous side letters.
Under the RICS Code for leasing business premises, Feb 2020, things to put in HoTs as a minimum are ok. But the Code does not differentiate between service charge and maintenance charge. In my view, unnecessary to state whether the lease is inside or ‘outside’ LTA54: by default all business tenancies are inside LTA54. ‘Outside the Act’ ia bad habit – correctly it is excludes sections 24-28.
Having satisfied the RICS HoT minimum, in my experience, surveyors generally abandon their client to the lawyers and do the client disservice. If client is lucky, then lawyers would consult the client’s surveyor, but when? Many lawyers are possessive, whether instructed or not they assume conduct of the matter. They take instructions from the client. Who knows best? The client, the lawyer, the client’s surveyor(if any)? Answer depends upon the effect of wording on asset management policy, rent review and renewal of the ’new’ lease.
Landlords allowing the tenant’s solicitors to draft the lease is asking for trouble. Tempting saving on costs, tenants slip nuances in wording of rent review. The landlord none the wiser until the first rent review is dealt with by a surveyor well-versed in business tenancy law and valuation.
My approach to documentation is HoT in detail, often several pages – longest I’ve done was 16 pages. Acting for the landlord, the client’s solicitor sends me the draft documentation for comment and approval before despatching it to the tenant’s solicitor. Acting for the tenant, the client’s solicitor sends me the draft for my comment before the solicitor starts on it. Any amendments material or seemingly immaterial are checked with me beforehand. The solicitor treats me as the ‘client’ for matters arising; time-saving for the client on decisions within my knowledge. The finalised version sent to me before engrossment to ensure all in order.
I provide solicitors with professional support to ensure the valuation intention at rent review. Despite templates, a failure to modify to suit the circumstances leads to all manner of issues. Jokers abound: a favourite, I should think, amongst third parties is to find the award or determination is expected within a week or so of appointment.
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