What is missing from an office lease? Five clauses a landlord will not write for you

Why are these clauses missing from the draft?

Landlords work from their own lease templates and those templates are the starting point of every negotiation. Tenants respond to what they can see in the draft, amend the wording they dislike, and rarely ask about situations the document does not regulate at all. Marika Skonieczna points out there is no bad faith in this: the landlord prepares the draft in line with its own interest and has no duty to act as the other side's adviser. She also notes that growing legal awareness among tenants, and their use of AI tools, has pushed some landlords to address a few of these points on their own, though still not in a form that fully protects the tenant.

Five clauses that are not in the draft

What happens if the landlord hands over the space late

A lease normally names a handover date and a commencement date, but says nothing about what follows if the landlord runs late with fit-out works or fails to obtain a permit. How much that hurts depends on the tenant's position. A company sitting in its own building and simply outgrowing it is not being evicted, so a rent discount is usually compensation enough. It becomes a real problem when the current lease is expiring and the landlord will not extend it by a two or three month addendum, because another tenant is already waiting for the space and its fit-out has to start.

How to draft it: match the remedy to your own situation. The options are a contractual penalty, temporary premises in the same building, and increasingly the landlord covering the cost of flexible office space or a coworking membership together with the cost of moving. Marika notes that temporary premises in the same building, for years the most common answer, is often unrealistic today simply because there is no vacant space. A contractual penalty only works if it genuinely covers the cost of the substitute office or the fee for holding over in the old space.

When the guarantee has to be topped up

Tenants usually choose a bank guarantee over a cash deposit so as not to freeze cash, and the guarantee is typically issued for one year. The obvious top-up case is when the landlord has drawn on it after a breach. The less obvious and far more frequent case follows from how the security is calculated: as a multiple of current rent and service charges, both of which move during the year. In theory a tenant can end up at the bank three times a year, having issued the guarantee in March, learned of a service charge change in May and a rent change in June.

How to draft it: there are two ways out. The first is a percentage threshold, usually five, seven or ten per cent, below which the difference is settled only at the annual renewal. The second is permission to top up partly in cash, transferring the missing amount to the landlord until the new guarantee is issued, at which point it is returned. Marika stresses this matters because the guarantee clause is backed by penalties and termination rights, so repeated demands to top it up are an easy lever against a tenant the landlord would rather replace.

How a service charge audit should work

An audit right is often present, but in a token form: the tenant may review documents and raise objections, and the landlord may or may not take them into account. Very little follows from such a clause.

How to draft it: regulate the whole procedure, meaning how long the audit may take, where it happens, whether the tenant may bring an external specialist, and what happens once something is found. Overpayments are best tied to the existing annual reconciliation procedure, so the landlord either refunds the surplus or credits it against future charges. The second point is cost: if the audit shows a material discrepancy, and Marika usually proposes a five per cent threshold, the landlord should cover the cost of the audit, because reconciling the charges correctly was its job as a professional paid out of the service charge itself.

The list of charges is a separate matter. A closed list of costs is unobtainable today, because the pandemic and the war across the eastern border added many new obligations on the landlord side. The workable substitute is a list of exclusions, naming the items that may never enter the service charge. It typically covers the landlord's income tax, or the often overlooked category of contractor costs for repairs caused by the landlord's own neglect, such as maintenance that was never carried out. Such a list makes a later audit far easier and heads off disputes, and in practice the tenant has to ask for it. Marika has seen only one landlord, Vastint, propose a list of exclusions on its own initiative.

Who removes defects, and within what deadline

Leases normally cover major events such as fire, partial collapse or force majeure, because landlords volunteer solutions there. What they usually pass over is the far more frequent case of defects caused by the landlord's own neglect: maintenance not performed on time, or a fault on neighbouring space not repaired quickly enough to limit further damage, so that a leak next door turns into mould in the tenant's office. "We are a professional landlord, so of course we will fix it" sounds fine during negotiations; practice varies.

How to draft it: set a deadline for removing the defect and a contractual penalty for missing it, because a tenant's scope for self-help is narrow. Substitute performance requires court approval, risks breaching the landlord's system and installation warranties, which may come back as a claim against the tenant, and offers no certainty of reimbursement, since the landlord can dispute the costs as non-market. The lease should also say what happens when the defect affects a larger part of the space: whether temporary premises are due and whether the tenant may exit.

The definition of total inability to use the space deserves particular attention. Intuitively it means the whole office is down, but in practice a flooded server room occupying three per cent of the floor area, out-of-order toilets or no running water in the kitchen is enough to stop an employer admitting staff at all. Filip adds that in some business models, such as a coworking operator, losing thirty per cent of the space already breaks the economics, so this list has to be tailored to the tenant's own activity every time.

Who pays for repairs still covered by warranty

During fit-out it is usually the landlord that buys the equipment and carries out the installations, and many of those elements come with a manufacturer's or contractor's warranty. The lease sets out which repairs fall on the tenant, but ignores the fact that for the first year, two or three, some faults are simply covered. The tenant ends up paying for repairs it never had to pay for.

How to draft it: formally the landlord could assign the warranties to the tenant at handover, but that means checking whether each one is transferable, so few are willing. A notification procedure is simpler: if something fails within the warranty period, the tenant reports it to the property manager, who coordinates the repair under the warranty. The fit-out scope of works serves as a proxy list, since whatever was part of the fit-out is new, and whatever is new is usually still covered. The practical rule from the episode: before commissioning an expensive repair, ask the property manager whether the item is under warranty.

Bonus: which language do you sign in?

More and more landlords are foreign funds that require the lease in English. That is not a problem in itself until the lease needs a notarised declaration of voluntary submission to enforcement, known in the market as "three sevens" after article 777 of the Polish Code of Civil Procedure. A Polish notary will not draw up that deed on the basis of a foreign-language document, and AI translation is of no help, because a certified translation by a sworn translator is required. Most notaries want the entire lease rather than an extract, and leases run long. The tenant is left with a bill of around seven to eight thousand zloty and the risk of missing the deadline, if the three sevens are due, say, two weeks after signing.

How to draft it: secure the Polish version during negotiations, ideally a two-column Polish and English lease signed in both versions. If everyone is in a hurry and the deadline for the three sevens is further out, you can sign the English version and oblige the landlord to cover the cost of the translation.

Questions and answers

What should a lease provide if the landlord hands over the space late?

A remedy matched to the tenant's situation. If nobody is forcing the tenant out of its current office, a rent discount is usually enough. If the current lease is expiring with no way to extend it, you need a contractual penalty large enough to cover a substitute office, temporary premises in the building, or the landlord covering coworking and moving costs. At today's vacancy levels, temporary premises in the same building are often unavailable.

When can a landlord demand that the lease guarantee be topped up?

When it has drawn on the guarantee after a breach by the tenant, and when its value has fallen below the level set in the lease, because it is calculated as a multiple of current rent and service charges, which change during the year. To avoid several trips to the bank each year, agree a percentage threshold that triggers the obligation, or permission to top up in cash until the guarantee is renewed.

Can a tenant recover the cost of a service charge audit?

Only if the lease says so. The default is that the tenant bears the cost, which is why it is worth stating that where the audit reveals a material discrepancy, commonly a five per cent threshold, the landlord covers the cost. The reasoning is simple: reconciling the charges is the landlord's duty as a professional, paid for out of the service charge.

Why can an English-only lease become expensive?

Because a Polish notary will not issue the declaration of submission to enforcement, the "three sevens", on the basis of it. A certified translation by a sworn translator is required, usually of the whole lease, which for a long document means seven to eight thousand zloty and several days of delay. The fix is a bilingual lease signed in Polish as well, or an obligation on the landlord to cover the translation.