You are about to sign the dotted line. Pen in hand, you’re ready to sign a lease for that perfect commercial property site. However before you sign, it is wise to do some final important checks.
Keeping in touch
You will need to find out who is responsible for maintenance on your premises. Many leases will state that the tenant will have to maintain the property, as you could end up with a hefty bill at the end of the lease. Essentially, you will have to give back the site in the condition you initially found it. Do not be fooled if a property is new either, as design and construction faults could still cause expensive defects.
If the lease stated that you are only partly responsible for some maintenance tasks, then everything else must be repaired by your landlord. As a general rule of thumb, the landlord is responsible for external and structural repairs and maintenance, and the tenant is responsible for internal and non-structural ones.
Note that when insuring the building and contents, this is down to you.
Go to any length
Be sure to ask for some flexibility in the lease in case you want to either extend it easily or end it early.
Remember that under the Landlord and Tenant Act 1954, all commercial leases over six months long will be protected. This means that a landlord must give enough notice before a lease abruptly ends, due to you not meeting rental payments or the landlord needing the property back. This same Act also states that if you and the landlord cannot agree on rent, the court will do it for you.
Ask the landlord if you can have an initial rent-free period as part of your terms, which means you can fit in the premises without any initial financial burdens, whilst it is advised that you agree with your landlord to change your rental payments to monthly, rather than the quarterly lease-standard to give yourself more flexibility with your budget. Note that some rents may have VAT on them, and if you are not VAT-registered, you will not be able to claim this money back as expenses.
Rent reviews, which allow the periodical adjustment of commercial rents to the market level current at the date of review, will look at how much rent is being paid within market trends, so that the landlord does not rip you off when trying to change the rent halfway through the lease term.
Furthermore, if you choose to pay a rental deposit in advance, place it in a separate deposit deed and account so that it is held on trust. This means that your money will be protected in case the landlord goes bankrupt. Landlords are legally entitled to take money from this deposit however, if you fail to pay your rent on time.
Check how the rent can be paid, via cash, check, paypal or direct debit, and see if the rents will include any rates. Check if there are any shared services such as security, parking and reception staff, whilst there may be utility costs added as part of the lease.
Be sure to fully read the small print for offices to rent before signing anything, and whenever in doubt, as commercial property can be a tricky sector. You may just regret it otherwise.