Your lease will contain obligations on you to pay the rent you have agreed. Rent is normally paid in advance. This means that on day one of your lease you pay rent up to the next rent payment date, which will normally be the first day of the following month (if you pay monthly), or the next quarter day (if you’re paying quarterly).
In case you need reminding, the usual quarter days are 25th March, 24th June, 29th September, and 25th December.
After your first payment, you make your future payments in advance on those regular dates.
If VAT is payable, then that has to be added to the basic amount. VAT is not always payable. It depends on whether the landlord has opted for their building to be subject to VAT or not. If you are going to be running a business which is not able to recover VAT, then you should check before signing the lease that VAT will not be chargeable, and your solicitors should request some assurance or guarantee that the situation will not change.
The payment demands you will receive from the landlord will probably include amounts for service charge and insurance premiums on the building. Service charges are normally collected by landlords based on an estimated figure for future costs, so that they have money in hand for expenses. They might be divided up into quarterly or monthly instalments like your rent. With insurance premiums – your share of the annual premium for the building insurance – this is often payable on demand, in one lump, because that’s probably how the landlord has to pay it to the insurance company.
If nothing is said in the lease about it, you may have a right of “set off” money the landlord owes you against the rent. This means is that you are allowed to deduct what is due to you from your rent payment to the landlord. Whether that applies, depends on the circumstances, and you would need to get legal advice on it.
However, landlords usually put that totally out of the question by including a clause in the lease saying that the tenant must not exercise or seek to exercise any right to withhold or deduct – “set-off” being the technical term – any money due to the tenant under the lease.
So, if you think the landlord has overcharged you for service charges, or owes you for loss of business when a fuse blew in the basement, you can’t deduct that cost from your next rent payment. If you do, you run the risk of the landlord legitimately kicking you out of the premises for failure to pay rent.
The days when you might pay your rent by cheque are gone, and, for the sake of convenience, most landlords will now insist that you pay rent by electronic bank transfer.
Landlords may try to insist in the lease that you must set up an automatic direct debit.
That service charge payments and insurance premiums are also “rent”. This is because tenants’ default in paying “rent” gives the landlord some greater leverage than when just claiming other payments due under a lease.