When you’re choosing a new office, the excitement usually starts with the fun stuff — the natural light, the breakout spaces, the coffee machine you know will win your team over. But behind every seamless office move sits one crucial document that sets the tone for everything that follows: your heads of terms.
These are the framework your solicitor uses to build your lease, and they’re the closest thing you’ll get to shaping the deal on your terms before anything becomes too complicated or expensive to renegotiate. A clear heads of terms agreement gives you momentum, protects your position, and helps you understand exactly what you’re signing up for. And when you’re running a busy team, clarity is the gift that keeps on giving.
What is meant by ‘head of terms’?
Heads of terms (often shortened to HoTs) are a set of key points agreed between a landlord and a tenant before the full lease is drafted. Think of them as the outline of the deal: rent, deposit, incentives, lease length, rights, responsibilities, and everything your solicitor will turn into the full legal document.
Heads of terms essentially set the commercial deal, the boundaries of the lease, and the rules everyone is agreeing to follow.
At this stage, nothing is written in heavy legal language. It's a clear summary where everyone gets aligned on “the deal we’re shaking hands on”.
Because the heads of terms lease acts as the foundation for the full lease, the more precise it is, the smoother things tend to go. Landlords’ solicitors love detail. Tenants’ solicitors love clarity. And you? You get a quicker, cleaner move-in.
Why heads of terms matter for office leases
A strong heads of terms agreement transforms the whole leasing experience. Here's why:
- It prevents delays later: If a clause isn’t agreed upfront, solicitors will debate it later — usually at your expense.
- It triggers the exclusivity period: Once HoTs are agreed, the landlord takes the space off the market for around 28–30 days. During that window, the office is yours to secure.
- It puts you in control: You know exactly what you’re signing up for before solicitors start drafting the 30–40 page lease.
- It stops surprises: Every cost, responsibility, restriction, and benefit is known early — especially important for startups and scale-ups who need predictable budgets.
A good set of HoTs sets the tone for your whole leasing journey.
Who prepares heads of terms?
Heads of terms are normally prepared by the landlord’s agent. They lead the drafting because they know the building’s standard lease terms, service charge structure, repairs obligations, and so on.
But — and this is important — you absolutely have a say in what goes in them.
It’s your chance to negotiate on:
- Rent
- Rent-free periods
- Break clauses
- Deposits
- Alterations
- Signage
- Whether the lease is inside or outside the Act
- Rights to assign or underlet
A good agent will also make sure you’ve got:
- A clear red-line lease plan
- A precise measurement of the space (crucial for rent and service charge)
- Transparency around business rates
- A sense of the landlord’s flexibility
If you’re working with a tenant rep broker, they’ll negotiate this all on your behalf. If you’re doing it alone, it’s worth taking the time to understand each clause so you don’t inherit a lease that limits your future plans.
Do I need a solicitor for heads of terms?
No, you don’t need a solicitor to draft heads of terms. Most tenants only bring their solicitor in after HoTs are signed and the lease enters the legal stage.
But getting informal legal input at the HoTs stage can save you headaches later, especially on:
- Security of tenure wording
- Break clause conditions
- Alienation clauses
- Repair and reinstatement obligations
- Deposit terms tied to covenant strength
- Subletting and assignment rights
If you want the most tenant-friendly outcome, a quick review from a commercial property solicitor before signing HoTs is a smart move. It costs less than revising a full lease later.
Are heads of terms legally binding?
Clients ask this a lot, so let’s be clear: Are heads of terms legally binding? In most cases, no — unless the document explicitly says otherwise. Most HoTs include the phrase “subject to contract”, which tells everyone that nothing becomes legally enforceable until the full lease is signed.
Even though they don’t create a legal obligation, they do set a clear commercial expectation. Once heads of terms are agreed, the landlord usually grants an exclusivity period and both sides treat the document as the basis of the deal. Landlords expect you to follow what you’ve agreed, and you’ll expect the same level of commitment from them.
So while the heads of terms meaning doesn’t stretch to legal enforceability, it does carry weight. It’s a practical, good-faith agreement that shapes how the transaction moves forward.
How to write a head of terms
Whether you’re reviewing HoTs or preparing your own, here’s what a thorough, tenant-friendly set of heads of terms should include — all in plain English, without jargon for the sake of it.
1. The demise (the space you’re taking)
This defines exactly what you’re renting. Not roughly. Not approximately. Exactly.
Expect to see:
- Building name
- Floor(s)
- Net internal area (NIA)
- A red-line lease plan
Always request the plan early. It’s the visual confirmation of what you’re paying for.
2. Measurement
Rent is priced per square foot, so accuracy matters.
Best practice:
- Ask for an independent measurement survey from a reputable firm
- Accept a 5% variance only for very small spaces
- Never rely on a rough estimate for anything over 1,000 sq ft
This protects your budget — and your sanity.
3. Lease term
Common office lease lengths could be 3 years, 5 years, or 10 years with a 5-year break. Anything over 25 years becomes a long leasehold arrangement, which is a different world entirely.
4. Rent and rent-free periods
Your HoTs should confirm:
- Annual rent
- Per sq ft rate
- Rent-free period (if any)
- Whether rent-free applies from lease commencement or access date
Fitted offices usually have smaller incentives. Unfitted spaces have more flexibility.
5. Surety (rent deposit)
Your deposit depends on covenant strength — basically, your financial standing.
Industry standard profit test:
- If net profit is 3x the annual rent for 3 consecutive years, you usually avoid a deposit.
- Alternatively, 5x the annual rent in cash can replace the deposit requirement.
New or early-stage companies may be asked for:
- 3–6 months’ rent
- Sometimes 9–12 months for very weak covenants
If a landlord asks for something too high, ask them to justify it with your financials.
6. Security of tenure
This decides whether you have the automatic right to renew your lease.
Most leases are contracted outside the Landlord and Tenant Act 1954, meaning:
- You don’t have a right to stay when the lease ends
- The landlord has more flexibility
- This is the standard for multi-let office buildings
If you see “inside the Act”, ask why. It’s rare for offices, and it limits the landlord’s control of the building.
7. Break clause
A tenant break clause gives you flexibility.
For the safest, simplest break:
- Ask for a single condition: rent paid up to date
- Look for the word “rent” (singular) — this means only base rent
- Avoid “rents” (plural) — this includes insurance and service charge
- Push for 6 months’ notice (landlords like 9–12 months, but 6 is common)
Break clause wording is a big deal. One missed £50 insurance payment can invalidate your break if the clause is drafted poorly.
8. Alienation (your right to assign or underlet)
This is your flexibility clause.
Assignment
Transfer the lease to a new tenant. Useful if you outgrow the space.
Checks the landlord will do:
- Covenant strength of the new tenant
- Profit test
- Possible deposit
If the incoming tenant is weaker, the landlord might ask for an Authorised Guarantee Agreement (AGA) — meaning you're still partly on the hook.
Underletting (subleasing)
Rent out part of your space. This works well if:
- You have space to spare
- You plan to grow into it later
- You don’t want to leave the building
Subleases must be at market rent, and landlord approval is required. Expect delays if the landlord moves slowly.
9. Alterations
This defines what changes you can make to the space.
Good HoTs separate:
- Alterations needing consent (e.g., anything affecting building systems)
- Alterations not needing consent (e.g., moving internal partitions)
If you’re adding:
- Extra meeting rooms
- HVAC systems
- Rooftop plant
- Basement cabling
Make sure these rights are written clearly from day one.
10. Reinstatement
This is the condition you’ll return the space in.
Two main types:
- Photographic schedule of dondition: You only return the space to the condition you received it in. Always the safest option.
- Broom-swept condition: Light clean and handover. More common when the building is due for redevelopment.
Your future self will thank you for being thorough here.
11. Business rates
Heads of terms should confirm:
- Rates payable
- Current rateable value
- Whether the building is due for revaluation soon
Rates change every 5 years. Budget for increases — especially in London.
12. Insurance
Tenants cover:
- Contents insurance
- A contribution to the landlord’s building insurance (usually ~50p per sq ft)
Simple and predictable.
13. Green lease clauses
These support the building’s EPC rating and Minimum Energy Efficiency Standards (MEES). Expect clauses stating you can’t downgrade lighting or install inefficient systems.
14. Signage
Often overlooked — but essential for visibility.
Negotiate:
- Lobby signage
- Directory boards
- Door vinyl
- External signage (if possible)
15. Costs
Heads of terms usually state that each party pays their own legal costs. If a landlord wants you to cover theirs, push back. It’s not standard.
16. Timescales and exclusivity
The exclusivity period (usually 28–30 days) starts once HoTs are agreed. This is your window to get the lease signed.
During this time:
- The landlord stops marketing
- You commit to progressing the deal
- Your solicitor moves everything forward
A clear timeline keeps everyone accountable.
What happens after heads of terms?
Once HoTs are signed, a few specific things happen:
- The building goes under offer: This is your exclusivity period, usually around 28–30 days. During this time, the landlord pauses all viewings and stops negotiating with anyone else. It gives you the breathing room you need to progress the deal without worrying about another company swooping in.
- Solicitors draft the full lease: Your heads of terms now become the framework for the full legal document. The lease grows from a few pages of clear commercial points into a detailed agreement, built line by line from what was agreed upfront. The clearer your HoTs, the quicker this stage tends to be.
- Searches and due diligence begin: Your solicitor will carry out all the necessary checks to make sure the building is compliant, safe and suitable. This includes anything from reviewing planning permissions to checking for potential legal issues that could affect your occupation. It’s not the most glamorous part of the process, but it’s essential.
- You finalise fit-out plans and tech requirements: With the space secured, you can start shaping how your team will use it. That might mean planning meeting rooms, mapping out desk layouts, checking power and data points or reviewing any works that need landlord consent. This is where your new office starts feeling real.
- Both parties negotiate any remaining lease wording: Even with a great set of heads of terms, there are always small details to iron out. Your solicitor and the landlord’s solicitor work through the finer points, making sure everything aligns with what was agreed commercially. It’s a tidy-up stage, rather than a full renegotiation.
- The lease is agreed, signed, and dated: Once everyone is happy, the final lease is approved. Signing and dating the document formally commits both sides. It’s the moment everything becomes legally binding — and usually the moment excitement starts to kick in.
- You get the keys! With the paperwork done, you’re ready to move in. Time to plan the first coffee in your new space, update your team's calendars and start making it feel like home.
When your heads of terms are thorough, this whole journey feels clear and manageable. When they’re vague, you can end up navigating avoidable delays and back-and-forth debates. Strong HoTs set the tone for a smoother, more confident move into your new office.
Heads of terms: Your foundation for a smooth office move
Understanding heads of terms gives you confidence — and that confidence shapes better decisions for your team, your budget, and your long-term plans. Whether you're a startup moving into your first office or a fast-growing company taking an entire floor, strong HoTs help you secure the space that helps your people thrive.
And if you're ever unsure, remember: every clause is negotiable at this stage. You're allowed to ask questions, push back, and shape the deal so it truly fits your business.
With the right heads of terms in place, securing your new office becomes a whole lot smoother — and that’s exactly where Tally Workspace comes in. We’ll help you find the perfect space for your team and support you through the rest of your office move, so you can focus on settling in and doing your best work.
