You are ready to exchange contracts with the prospective tenant of the commercial property when:
Until contracts have been exchanged, you can choose to let to another interested party unless a lockout agreement has been entered into.
This law is different in Scotland – a lockout agreement is not required. There is not a legal compulsory contract between two parties. This means until the contract has been concluded, either party can walk away from the deal without any penalty.
Completion is usually one month after Exchange of Contracts. This can be varied prior to Exchange of Contracts and again will be outlined in the HOTS. Once the balance is paid, the contract is completed.
Letting a Commercial Property – Drafting a Heads of Terms (HOTS)
Commercial Property Guides