Leasehold:
The
occupation of commercial business premises by means of a lease from a private
landlord or an institutional lease from a pension fund or similar is a well
tried and tested method of getting the real estate you need to undertake your
core business activities.
In
recent years there has been a movement in the manner in which there leases have
come to be drafted with, arguably, more flexibility being driven into the
process by market demands. The days of
institutional leases of 25 years, with no breaks and upwards only rent reviews
as the norm are probably no more, with the legacy if these practices of the 1980’s
and early 1990’s hanging around for a few more years to come.
For
most large organisations, the acquisition of new commercial property by this
means is a well trodden path which holds no concerns or fears. For those less experienced, here are my top 5
tips when considering this undertaking:
- Term: The
term of any lease and the potential for breaks (which must be able to be
exercised by either party, not just the landlord) in that lease, must
align with your organisational business plan over the medium to long term.
- Demise:
Make sure you are clear on what is included and what is excluded in
the demise you are considering.
Favourites for unintended inclusion and exclusion are toilets and
lifts (elevators for those in the
- Total Costs: As well as your rent, don’t forget that
there will be other costs associated with taking over leasehold space. Business rates are a given, and can be a
significant expenditure item and also make sure you understand what service
charge your landlord is proposing to levy and what you get for it. There may be others too, some landlord
are providing other services on an opt in basis, make sure you tick the
opt out box if you are not going to use them.
- Legal:
Commercial
leases are significant, weighty and binding documents. Ensure that you have sought, and
importantly listened to, professional advice about the lease you are about
to enter into. It is essential that
the lawyer that acts for you is a specialist in the field and knows their
way around the clauses that will be buried somewhere in the lease, ready
to pop up at an inopportune time to cause you problems.
- Alterations, changes and dilapidations: You have you new lease in place, you may
even be enjoying a rent free period to fit it out to your
requirements. Make sure you know
whether you need your landlords permission for those works, any subsequent
changes, what process that permission will require to achieve and what
your liabilities are in respect of dilapidations at the end of the lease.
James
Alexander Consultants can help you find your way through to the best solution
to your accommodation needs.
eMail us
on innovation@jaltd.co.uk or
see our contact page for our numbers. We look forward to speaking with
you.
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