01 Jun 2026
By Jennifer Davidson, Associate, Real Estate, Gilson Gray
In commercial leasing, it is not unusual for tenants to take entry to premises on the strength of concluded missives, with the formal lease to follow. While this works commercially and for practical reasons of the availability of all parties to sign the lease, it is becoming more common for issues to arise with utility providers where there is the absence of a fully signed lease at the date of entry.
In practice, it is becoming common for utility supplies not to accept missives as sufficient evidence of occupation. This can create immediate and significant operational difficulties for incoming tenants, as the majority of utility providers typically require formal documentation before setting up or transferring accounts.
Whilst missives are legally binding, they are often rejected because:
As a result, tenants may find themselves unable to open accounts in their own name at the start of the lease, which can cause delays in transferring existing accounts, setting up new agreements and may even lead to delays in accessing essential services such as gas, electricity, internet and telecommunication installations.
This can have a major impact on tenants and can lead to breaks in trading and loss of revenue, particularly in the retail, hospitality, or manufacturing sectors.
While practical and, in some cases, utilities may remain in the landlord’s name on a temporary basis, this can introduce issues with apportioning use, disputes between landlord and tenant over use and liability issues if there are any arrears. From a landlord’s perspective, this can result in a degree of financial exposure and create an administrative burden on the landlord.
Delays in securing utilities can have a knock-on effect on any fit-out works planned and the initial IT/communications set up required at the start of a new lease, with the result being that opening dates can be delayed.
While missives create a legally binding contract and, in practical terms, create a solution where all parties are not available to sign the lease on or prior to the date of commencement of the lease and allow the lease to commence in the absence of a fully signed document, they are increasingly not recognised in practice by most utility providers as adequate proof of occupation and can lead to operational issues.
