When you visit the premises, check who your neighbours will be. This is very important as it will affect your business. You’ll also need to know if your business will affect residents and other businesses, and in what way. Check the state of the premises – how much it will cost to repair any damages and who will pay for repairs before you sign the lease. Check if the structure of the building and facilities comply with health and safety. In short, are the premises fit for purpose? Will your business prosper in the area?
Did you know that it is reasonable to ask the landlord for a rent-free period? If you check the property out before committing to leasing, make a list of anything that needs repairing and altering. You will have some refurbishing work to do, so the time you’ll spend repairing and refurbishing the property will mean effectively loss of income because you won’t be trading from the premises. You’ll be surprised at how accommodating a landlord can be if you’re carrying out repairs and improvements to the property. Remember also that once you sign the lease, you’re responsible for council tax and any utility bills – these are a burden to the landlord until you sign the lease.
After carefully and thoroughly reading the lease before making a commitment and signing it, check if there are any clauses relating to repairs, improvements and alterations. It’s not enough to get a smile and a handshake from your landlord, you need a legal agreement by way of a clause or clauses in the contract. So decide first what repairs, improvements and alterations will be needed, discuss it with the landlord and agree to include these as clauses in your contract.
And talking about clauses in the contract, as you’re in discussions with the landlord, ask if they’re happy to add and alter clauses in your contract. A lease agreement can be a template or standard by default but it can and should be amended to suit each and every business. If there’s no flexibility in accommodating a lease to a new tenant and their business, then there’s very little faith in your future landlord’s flexibility – you should find it easy to liaise and negotiate with your landlord.
A break clause option allows you to end the lease if you need to leave the premises because your business has done so well that you need a bigger space, or the very opposite has taken place and you need to relocate in order to save your business. Whatever the reason, it would be ideal not to be tied down to a full term lease, and to have an understanding with your landlord that if things take a different direction, you’ll both be ready. With a break clause in the contract you won’t need to worry about penalties for terminating a contract earlier than expected.
If you would like to have an informal discussion with a commercial property solicitor and look at further steps to consider before leasing a commercial property, please give us a call. Your first consultation will be free. By Sandra Garcao
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