Commerical Tenants: A Guide To Renting

Considering becoming a commercial tenant?  Davis Brown – a firm of Chartered Surveyors and Estate Agents in Fitzrovia are here to help you with the process.  We are regulated by the Royal Institution of Chartered Surveyors so you can take full advantage of our professional expertise.  Here’s a guide that we at Davis Brown have put together to help you with the process.

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 property agent at Davis Brown, Fitzrovia can advise you on the correct User Clause which is suitable for you.

Tenant Considerations:

Once you have found your property of choice-before you contact the commercial agent at Davis Brown or landlord, you’ll 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).

Submitting your Offer:

You must submit all offers in writing.  You’ll need to provide the landlord or commercial agent with your company accounts (usually the last 3 years).  You’ll also need to provide bank details and current landlord details for references (your bank may charge you for this service – £15/£20 per reference).  You’ll also need to supply solicitor details to the landlord/estate agent.  Try to supply as much information as possible to the landlord/estate agent supporting your offer.

Accepted Offer:

Once your offer has been accepted, the landlord or commercial agent will send Heads of Terms out to all relevant parties and their solicitors.  This 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”, taken off the market and no further viewings will 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 take 6 weeks to complete.  During this time, you could visit the premises to take measurements of windows etc for blinds, check the IT/Telecoms supplier (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’ll need the Landlord’s permission for this) and arrange for floor plans and designs for your required layout.

On Completion:

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.

Break Clause:

If your lease has a “break clause” which allows either you or the landlord to terminate the lease before the lease expiry date, make sure you take a note of the date this must be completed by.  A break clause will normally require between 6 to 12 months’ notice, so 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).  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.  They will need to give you 24hrs notice before any viewings take place and the agent will make sure any disruptions are kept to a minimum.



Around 1 or 2 months before you leave the premises; the landlord will send a representative to visit your premises to undertake a “Schedule of Dilapidations”.  This will provide you with a step by step guide of all works that must be undertaken, making sure that the premises are left in a good condition.

Moving Out:

As when you moved in, the landlord or their agent will visit you to take meter readings and to collect all keys.  You’ll need to inform 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.

For more information, please contact Davis Brown – your Estate Agents and Chartered Surveyors based in W1 – who will be happy to help you with every step of the way.




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