When charities or social enterprises take on new premises, understanding key charity property lease terms is essential. This A–Z glossary provides clear, practical definitions to help you navigate lease negotiations confidently and ensure your organisation makes informed decisions about its property obligations.
This guide is designed for:
- Charities considering new premises
- Social enterprises expanding or relocating
- Boards and decision‑makers reviewing lease documentation
- Anyone involved in property management within the voluntary sector
Use this glossary as a reference when reviewing Heads of Terms, negotiating with landlords, or planning long‑term property commitments.
Glossary of charity property lease terms (A–Z)
Alienation
Refers to dealings with the property by the tenant of a lease and therefore covers assigning, underletting, parting with or sharing possession or occupation of property. Typically, a lease will contain restrictions on a tenant’s ability to do so without the landlord’s prior written consent.
Assignment
A lease may permit a tenant to assign (or transfer) the whole lease to another tenant, subject to landlord consent and meeting certain criteria set out in the lease.
Asbestos Management Report
A report which identifies, records and assesses the condition of any asbestos containing materials within a property. Tenants with maintenance duties must manage asbestos.
Break Right (Break Clause)
A clause in a lease allowing the landlord and/or tenant to terminate it early (or on a rolling basis), subject to notice and conditions.
Common Parts
Areas inside or outside of a building that are shared with other tenants or the landlord, such as reception areas, facilities, hallways, stairs, external accessways and grounds.
Designated Advisor’s Report
A report required under Section 119 of the Charities Act 2011 containing information prescribed by regulations. The report must be prepared by a fellow or professional associate of the RICS (with separate experts permitted for agricultural or residential property).
EPC (Energy Performance Certificate)
A certificate rating the building’s energy efficiency. Landlords must usually provide an EPC of at least an E rating.
Effective FRI (Effective Full Repairing and Insuring)
In a multi-let property, the tenant will be responsible for repair of its own property and will also contribute through a service charge towards the cost of repairing the exterior and structure of the building together with the cost of insurance.
FRA (Fire Risk Assessment)
An assessment of fire risks and necessary actions. Tenants typically must ensure FRAs are completed and acted upon.
FRI (Full Repairing and Insuring)
The tenant is responsible for all repairs and insurance costs.
Heads of Terms
A document which sets out the terms of a transaction agreed in principle between the landlord and tenant in the course of negotiations. Heads of Terms should contain a brief summary of the main commercial terms agreed. It is important to note that Heads of Terms are not usually legally binding.
Indemnity
A promise by the tenant to compensate the landlord for losses arising from the tenant’s breaches or actions.
Inherent Defect
A defect present when building works were completed but not apparent at inspection.
Insurance Rent
A payment by the tenant to reimburse the landlord’s building insurance premiums.
Insured Risk
Risks the landlord must insure against, e.g. fire, flood, storm.
IRI (Internal Repairing and Insuring)
The tenant covers internal repairs and contributes to insurance.
Licence for Alterations
Landlord consent for alterations, setting out approved works and related obligations.
Open Market Rent Review
Rent is updated based on current market rental value, agreed between parties or via expert determination.
Option to Renew
A contractual right allowing the tenant to renew the lease by serving notice within a specified period.
Permitted Use
The purpose for which the tenant may lawfully use the property, as defined in the lease.
Plant
Building machinery such as lifts, boilers, and air‑conditioning units.
Rent Deposit
A security payment made at the start of the lease, governed by a Rent Deposit Deed.
Rent Review
A mechanism that updates the rent during the lease term, often every 3–5 years. Reviews are usually upwards‑only.
Reservations
Rights retained by the landlord over the tenant’s property, such as access for repairs or rights over service media.
Rights
Rights granted to the tenant over areas not included in the demised premises, such as access routes or shared utilities.
Schedule of Condition
A photographic record of the property’s state at lease commencement, often used to limit repair obligations.
Schedule of Dilapidations
A document listing breaches of repair/decoration/reinstatement obligations, usually issued towards the end of the lease.
Security of Tenure
Statutory protection under the Landlord and Tenant Act 1954 allowing tenants to remain and request a lease renewal unless specific grounds apply.
Service Charge
A payment covering the tenant’s share of building maintenance, repairs, and services.
Service Media
Pipes, cables, ducts and utility connections serving the property.
Sharing
Allowing another party (e.g. group company) to share occupation on a limited basis.
Sinking Fund / Reserve Fund
Funds built up through the service charge to cover major future works or recurring maintenance.
Stepped Rent
Rent increases at set intervals (e.g. annually or every few years).
TIR (Tenant’s Internal Repairing)
The tenant is responsible only for internal repairs; the landlord covers external/structural repairs and insurance.
Turnover Rent
Rent based partly or wholly on the tenant’s turnover, common in retail settings.
Uninsured Risk
A risk the landlord cannot insure against due to exclusions or market conditions.
Need help reviewing a lease?
Hempsons’ specialist charity and social enterprise property team can support you with Heads of Terms, lease negotiations, and compliance with charity law requirements.