Automated Renewal Heads of Terms

A leasing surveyor still owns the renewal conversation. The model’s job is to assemble a first draft of heads of terms (HOT) from three sources that already exist on the file: the current lease, the market evidence pack, and the landlord’s written renewal position. The draft is a starting point for negotiation, not a substitute for professional judgement, and it is never issued until the surveyor has reviewed it.

This page is written for the person who has to get a compliant HOT onto paper before a tenant meeting, a landlord instruction call, or a solicitor handover. It assumes the property is already in the renew stage, and that the outcome you care about is speed without skipping the checks that keep the draft defensible.

Renewal HOT set out the commercial deal the landlord is prepared to put to the tenant: term, rent, incentives, repairing and insurance obligations, alienation, user, break rights, rent review machinery, and any other clauses the parties will actually argue about. They are not the lease. They are the short, numbered statement of intent that solicitors later turn into documentation.

A blank template slows the surveyor down because every clause has to be re-derived from the existing lease and then compared with what the market will support and what the landlord will accept. Copying last year’s HOT for a different floor, tenant, or rent review date creates the opposite problem: a fluent-looking document that is wrong on term commencement, passing rent, or a break that no longer exists.

The model produces a file-specific draft so the surveyor starts from the current lease language, the evidence they have already assembled, and the landlord’s position note, rather than from a generic form. Speed here means fewer hours reconstructing the file before the first mark-up, not automatic agreement with the tenant.

The draft is also a control document. If a clause cannot be traced to one of the three inputs, it should not appear as if it were agreed. Optional landlord asks belong in a clearly labelled alternatives block, not in the main terms, so a junior surveyor cannot send a wish list as if it were the instructed deal.

The model does not invent a lease, a comparable, or a landlord instruction. It reads what is on the file. Three inputs are mandatory. If any one is missing, incomplete, or internally contradictory in a way the model cannot resolve from the documents themselves, the output is empty. There is no partial HOT, no “best efforts” skeleton, and no clause filled from a house style sheet.

Current lease. The executed lease and any deeds of variation, licences, side letters, and rent review memoranda that alter the letting. The draft needs the parties, demise, term dates, passing rent and review pattern, break options, alienation and user provisions, repairing and insurance regime, and any unusual covenants that would be misleading to omit from HOT. A heads-of-terms pack that ignores a tenant break in year three is not a faster draft. It is a wrong draft.

Market evidence. The evidence pack the surveyor (or the instructed valuer) has already compiled for this renewal: agreed or quoted comparables, any index or open-market basis the instruction uses, and notes on incentives, rent-free, and specification that affect the rent and term the landlord can defend. The model does not scrape the market or substitute a regional average. It restates the evidence that is attached to the file and flags where that evidence is silent.

Landlord’s renewal position. A dated instruction or position paper: target rent and term, walk-away rent, incentive ceiling, whether a break is on or off the table, any non-negotiables (for example, no change to the repairing covenant, or a requirement for a rent deposit), and who is authorised to agree. An email that only says “renew if possible” is not a position. The model must not guess commercial intent.

Optional attachments (floor plans, service charge budgets, EPC, schedule of condition) can enrich a clause once the three mandatory inputs are present. They never replace them.

If the file is still being built, keep the work in the Renewal Pipeline Workflow Agent until lease, evidence, and position are all on the record. Do not ask this model to draft while those items are outstanding.

The composition sequence is extract, reconcile, then draft. Extraction pulls structured facts from the current lease and variations: dates, rents, options, and named covenants. Reconciliation compares those facts with the landlord’s position and with the market evidence, and lists conflicts instead of silently picking a winner. Drafting writes HOT only where the three sources agree or where the landlord’s position expressly overrides the status quo and the evidence pack still supports the number or term being put.

A typical draft follows the order a surveyor already uses in correspondence:

1. Parties, property, and existing lease reference, so the tenant’s solicitor can match the file.
2. Proposed term, commencement, and any holding-over or continuation mechanics that the current lease already sets.
3. Rent, rent-free or other incentives, and the review pattern, each tied to the evidence pack and the landlord’s target or walk-away.
4. Breaks, alienation, user, repairs, insurance, and any other clauses the landlord has instructed to change or hold.
5. Conditions (board approval, vacant possession of a related unit, deposit, or guarantee) that the position paper actually states.
6. An open-items list for facts the documents mention but do not settle (for example, a side letter that is unsigned, or a comparable with no lease extract).

Rent in the HOT should be consistent with the Renewal Rent Optimization Model when that model has already produced a recommended range for the same file. This drafting step does not re-run rent optimisation. It cites the rent figures that are already on the instruction and in the evidence, and it refuses to mint a new headline rent because the prose “needs a number”.

Language stays in HOT register: short numbered paragraphs, defined terms only where the current lease already uses them, and no recital of negotiation history. The model may propose two labelled alternatives when the landlord’s position itself offers a primary and a fallback (for example, five years with a year-three landlord break, or seven years without). It must not invent a third structure to “give the surveyor options”.

Where the current lease and the landlord’s position conflict (tenant break retained in the lease, landlord position says delete the break), the draft states both facts in the open-items list and leaves the operative HOT clause blank for that point, rather than choosing. The surveyor decides which version goes out.

The model drafts. The surveyor still sends the HOT. That split is not a courtesy. Heads of terms create reliance: tenants plan fit-out and relocation against them, and solicitors will treat an issued pack as the commercial deal unless it is clearly marked subject to contract and to landlord approval, where that is the firm’s practice.

Before issue, the surveyor checks at least:

• Identity and demise. Correct landlord entity, tenant name after any assignment, and the right floor or unit.
• Dates and options. Term start, review dates, and breaks match the lease as varied, except where the landlord’s position expressly changes them.
• Money. Passing rent, proposed rent, incentives, and any deposit or guarantee figures match the evidence pack and the instruction, including VAT treatment if the lease is elected.
• Silent clauses. Nothing material in the lease (for example, a keep-open covenant or a turnover top-up) has been dropped because it was awkward to summarise.
• Tone and authority. The pack is marked with the firm’s usual status (subject to contract, subject to board, without prejudice) and is addressed only to the party the surveyor is instructed to contact.

Edits stay in the surveyor’s name. If the landlord later tightens the walk-away rent, the surveyor updates the position paper and regenerates or redrafts; they do not ask the model to “refresh the numbers” from memory of an earlier chat.

Related file work can inform the review without changing who issues the document. A high break risk from the Lease Break Probability Model may explain why the landlord’s position insists on deleting a tenant break, but that model does not write the HOT, and this model does not score break probability.