Commercial Properties are divided into 4 main areas:
Retail – shops, supermarkets, hairdressers etc
Offices – self contained office suites, serviced offices, office blocks
Industrial – warehouses, industrial units, trade counter units etc
Leisure – restaurants, cinemas, public houses etc
These are again sub-divided but your commercial agent will be able to advise you on the correct User Clause which is suitable for your requirements.
Once you have located your property of choice, before you contact the commercial agent or landlord, you need to take the following into consideration:
Lease length (this can vary from one landlord to the next)
Break Option (do you, or the landlord, require a break option which will allow you to leave the premises before the end of the lease, if so, what is the notice period required)
Service Charges (what is covered in the service charge – not all service charge accounts will cover heating or cleaning)
Rent Deposit (how much is required)
Dilapidations (what are your responsibilities at the end of your lease)
Building Maintenance (how often is the building refurbished and what are your contributions)
Lease Restrictions (are you able to assign or sublet the lease)
Business Rates (you are liable for your business rates on the date that your lease has completed, check with your local authority to your liability, you may be able to apply for a discount, depending on the size of your company)
Additional Charges (ask if there are any additional charges which may not have been advertised – these will normally include your building insurance contribution and possibly a “sinking fund” contribution).
All offers must be made in writing. You will need to provide the landlord/agent with your company accounts (they will normally ask for the last 3 years accounts). You will also need to provide bank details and current landlord details so that references can be obtained. Please note that your bank may charge you for this service (typically £15/£20 per reference). You will also need to supply solicitor details to the landlord/agent. Try to supply as much information as possible to the landlord/agent supporting your offer.
Once your offer has been accepted, the landlord/agent will send Heads of Terms out to all relevant parties and their solicitors. The Heads of Terms will give an overview of the lease terms and will allow you a final opportunity to negotiate your terms, before draft contracts are sent. Once Heads of Terms have been agreed and solicitors instructed, the property will then be put “Under Offer” and ask for the property to be taken off the market and for no further viewings to take place. Your solicitor will then amended and/or approve the draft contract that has been sent and any amendments will be made between the solicitors. This can typically take up to 6 weeks to complete. During this time, it is advisable to re-visit the premises to take measurements of windows etc for blinds, check the IT/Telecoms supplier to the premises (if you have confirmed a “move in date”, you can contact your IT/Telecoms supplier in advance to book an engineer when you move), arrange for quotes for any alarm systems that you wish to install (you will require landlord’s consent for this) and arrange for floor plans and designs for your required layout.
On completion of the lease you will have to pay any rental deposit, rent and service charge (this will normally be 3 months in advance, depending on the quarter day), insurance contribution and any other charges in advance. Once the monies have cleared and the lease has been signed by all parties, you can then arrange with the landlord/agent a suitable time to collect the keys to your new premises. It is also advisable to take meter readings (gas, electric, water) when collecting the keys. Remember to also inform the local authority that you have taken over the lease in relation to your business rates.
If your lease has a “break clause” which allows either you or the landlord to terminate the lease before the lease expiry date, ensure you make a note of the date this must be completed by. A break clause will normally require between 6 to 12 months notice (i.e. if your break clause is 24th March 2018 with a notice period of 9 months, you must inform the landlord or their representative before 23rd June 2017). This notice must be given in writing. Expiry of your Lease or Exercising your Break Clause: Around 3 months before your lease expiry, the landlord may wish to start marketing the premises for a new tenant. The landlord’s representative will visit the premises at a suitable time and take marketing photos and possibly new measurements. A minimum of 24hrs notice will be required before any viewings take place at the premises and the agent undertaking the marketing will work with you and try to keep any disruption to a minimum.
Generally, 1 or 2 months before you leave the premises; the landlord will send a representative to visit your premises at a suitable time to undertake a “Schedule of Dilapidations”. This will provide you with a step by step guide of all works that must be undertaken to the premises before you leave to ensure that the premises are left in a good state of repair and condition.
As when you moved in, the landlord or their agent will visit you at the premises to undertake meter readings and to collect all keys to your premises. Inform all of your suppliers (gas, electric, water, alarm systems, IT/Telecoms) of your “moving out” date and inform the local authority in relation to your business rates.