A lease is a legally binding document which contains the terms that the landlord has agreed to let their property to you. Once you have found the ideal property to rent there are a lot of things to consider.
The permitted use definition in the lease will need to fully reflect what you intend to use the property for and if it covers all your business needs to run from the premises. Some will be more specific than others, for example it may state “retail shop” which will cover a number of businesses but others may state something very specific such as “shoe shop”. If the permitted use does not suit your business needs, you may be able to request a change of use from the local authority but you would need the landlord’s permission to do so.
You may be asked for a rent deposit. This is an amount of money given to the landlord at the start of the lease which gives them security on rent payments and making sure your obligations are carried out in accordance to the lease.
When agreeing to the annual rent amount you should consider if the amount is an acceptable level based on the condition, region and the local market. Seeking advice from a local property agent can be beneficial to making sure you do not over pay. You may also wish to consider if you want to pay rent monthly, quarterly or annually.
It is likely that landlords will request rent reviews at certain points in your lease, particularly in longer term leases. There are a number of ways a rent review can be done and it could mean a large increase depending upon the current market or retail price index. Seeking expert legal advice is crucial in understanding if there is a rent review included in your lease and how it will be carried it.
When deciding on the length of the lease there is a lot to consider. A shorter lease allows a lot more flexibility and may be preferable for a new business starting up. A longer lease allows for greater security but it can come with some long term liabilities.
Obtaining advice from an early stage is extremely important so you fully understand the terms of the lease in which you are about to sign.
It is strongly recommended that you seek independent legal advice from a commercial property solicitor. They will be able to advise you of the terms of the lease and any potential implications of the terms to you and your business. You will also be made fully aware of the rights and responsibilities included within the lease.
You may wish to seek independent advice from a local property agent or surveyor about the property and how much you would expect the rent to be in your region for that type of property. It may be that you can negotiate with the landlord or the landlord’s agent.
Here at Pinkney Grunwells our commercial property team combine in-depth legal and local knowledge with plenty of experience to remove some of the stress involved with finding the right property solutions for your business. We will work closely with you and your other advisers to ensure things progress as smoothly as possible.
For more information please contact our offices here.