You pay your own solicitors legal fees, and that should be it.
There is an Act of Parliament – Costs of Leases Act 1958 – which specifically covers this. It says that, in the absence of agreement in writing to the contrary, each party to a lease pays their own solicitor’s costs.
So, no one can say to you after you’ve signed the lease, “Ah, but we had a telephone conversation back when, don’t you remember? And you agreed to pay the landlord’s legal fees.” Or rather, they can say it, but you then say “I didn’t say it, but even if I had, there’s a law that says I don’t have to pay them.”
The exception to this is in that wording from the Act I just quoted … “in the absence of agreement in writing to the contrary…”. That means that, if you agree, in writing, to pay the landlord’s costs, that’s a different matter. Then you do have to pay them. For this to arise, there would have to be an exchange of emails or a signed document, so you can’t be in any doubt about it if that happened.
It’s hard to think of any reason why a tenant would agree to pay the landlord’s legal fees. But, I suppose when a particular type of property is in short supply, the tenant might have to agree to something which no one would normally agree to just to secure the deal.
But even if that is the case, you definitely want to agree a number up-front. The thing with leases is that you never know before you start how much time the lawyers will spend arguing over it. Your own lawyer might create unnecessary wasted time by raising lots of points which aren’t important. More likely, the landlord might try to impose an unreasonable lease, and your solicitor may be fighting tooth and nail to get it amended back into a reasonable form. Either way, you could then still be stuck with the landlord’s solicitor’s fees calculated on an hourly rate. So always agree a figure in advance (in the unlikely event that you actually do agree to pay the landlord’s legal costs for granting the lease to you).
If you are paying legal fees, you’ll probably also be paying “disbursements” – out-of-pocket expenses – and, of course, VAT. Disbursements don’t include the solicitor going out for a nice lunch; it includes expenses like search fees and bank transfer fees.
Once the lease is in place and you’ve moved into your premises, the situation is very different. If you want to sell the business and assign the premises to a new owner, or if you want to carry out alterations, you will have to ask the landlord’s permission. The lease will say that the landlord is entitled to require you to pay his solicitor’s legal fees for dealing with these.