BGBG

Taking a Commercial Lease

Are you considering moving into leased premises for your business? What do you need to know about taking a new commercial lease?

Are you considering moving into leased premises for your business? What do you need to know about taking a new commercial lease?

Every business has premises – even if it’s just a home office.  Most businesses do not own the premises they occupy because doing so ties up capital that could be used elsewhere.  Instead, most commercial property is owned by investors (often pension funds) who rent units to occupying tenants via commercial leases.  Such investors are concerned to make as much money out of the property they rent as they can.  A tenant on the other hand wants to pay as low a rent as possible and have a lot of flexibility in how it uses the premises.  There is, therefore, no agreement on what makes a “fair” commercial lease.

Between us, the legal team at Everyman Legal has experience in delivering legal advice on commercial leases of every kind imaginable! We have assisted numerous businesses of all sizes and sectors and can provide legal advice on:

  • the nature and effect of the documentation that you will be asked to sign;
  • your duties as a tenant;
  • your landlord’s duties to you;
  • what happens when the lease comes to an end;
  • what happens if your requirements change; and
  • the VAT and Stamp Duty Land Tax that you will have to pay.

Remember it is not enough to see if the lease you are offered works for you now.  What happens in the future is equally as important.  Without legal advice, you could:

  • pay much more rent than you were expecting;
  • find yourself liable to repair damage to the unit that was not caused by you;
  • have to guarantee the debts of the tenant that comes after you; and
  • be unable to dispose of the premises if you no longer need them.

Our dedicated team of solicitors based in Witney, Oxfordshire, would be happy to answer your questions.

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Heads of Terms

We would always recommend entering into Heads of Terms with your proposed landlord in order to record key terms. These should cover the following, in addition to any other specific points of agreement:

  • A full description of the property being leased

We would also recommend having the Heads of Terms reviewed by a solicitor before formal documentation is drafted and entered into. This will allow you to receive legal advice and therefore negotiate key issues early on in the process. If there is an issue that simply cannot be resolved as between you and your proposed landlord then you can walk away from the deal without having wasted too much time or money. The tough negotiations are always much easier to conduct at the outset when you, as tenant, have the bargaining power of being able to find alternative premises. Raising a key point for discussion two weeks before your intended move date may result in an unhappy ending!

Even if you have already agreed to basic Heads of Terms, you need to know exactly what you have agreed to and it is usually possible to re-negotiate your position in order to make it better.  Remember – nothing is contractual until the lease is actually entered into.

 

New Lease or Second-hand Lease

It may be that, rather than take a new commercial lease, you either take an assignment of an existing lease or sublet premises from an existing tenant. There are lots of other legal risks and issues to think about if this is something you are considering. Please see ‘New Lease or Second Hand Lease’ for further information on these options.

For more information

Please do not hesitate to contact an Everyman Legal Solicitor on 01993 893620 for a free discussion or email natalie.hopkins@everymanlegal.com

Commercial Searches & Enquiries

Whether you take a new commercial lease, or an existing commercial lease, we will undertake Commercial Searches & Enquiries on your behalf in order to check that there are no duties to local authorities or other public bodies or neighbouring owners that may prevent you using the property for your business or cost you money that you were not expecting to have to pay.  Your premises are your business’ home and you should take as much care in agreeing to rent them as you would in buying your own home by asking your solicitor to:

  • investigate the landlord’s ownership;
  • raise enquiries of the landlord;
  • carry out searches and making enquiries of public bodies such as local authorities;
  • check the planning situation; and
  • make sure there are no problems with the neighbours.

Remember, even if you take a commercial lease for just a short period, you are still entering into a contract on which you should take legal advice.

I was very impressed with the team. Everything was dealt with promptly. I felt completely safe in their hands, every detail that I needed to be aware of was explained clearly