A Construction Lease Agreement is utilized when a property owner wishes to grant both leasehold rights and construction permissions to a developer or tenant. This specialized agreement, governed by English and Welsh law, combines traditional lease provisions with detailed construction requirements, making it particularly suitable for development projects where the tenant will be responsible for significant construction works. The document typically includes construction specifications, timelines, quality standards, payment terms, and completion requirements, while also addressing standard lease provisions such as rent, term, and permitted use. It's essential for projects requiring significant property development under a leasehold structure.
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1. Parties: Identification and details of all contracting parties
2. Background: Context and purpose of the agreement
3. Definitions: Key terms used throughout the agreement
4. Demise: Description of the property and rights granted
5. Term: Duration of the lease and construction period
6. Rent and Payment Terms: Financial obligations and payment schedule
7. Construction Obligations: Detailed construction requirements and specifications
8. Insurance: Required insurance coverage during construction and lease
1. Step-in Rights: Rights of funders to take over the project if the original contractor defaults - typically included when external financing is involved
2. Environmental Provisions: Specific environmental requirements and obligations for environmentally sensitive projects
3. Planning Conditions: Specific planning requirements and conditions that must be met during construction and operation
1. Property Plan: Detailed plans and drawings of the property including site boundaries and access rights
2. Construction Specifications: Detailed technical requirements and standards for construction works
3. Construction Programme: Timeline and milestones for construction phases and completion dates
4. Form of Practical Completion Certificate: Template for certification of practical completion of construction works
5. Permitted Use: Specified allowed uses of the property during and after construction
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