Here are 10 tips the ACUMEN Commercial Property
Department has for you:
Asbestos:
If you're moving into a building built before the 80s, chances
are there's going to be asbestos throughout. This isn't the
end of the world: most asbestos is pretty much inert unless you
disturb it. However, you should certainly know about it
before you move in. Make sure you see the asbestos register
before you take on a lease.
Assigning/ Selling:
You may want to get rid of your interest in a property before
the end of the term, in which case you can sometimes assign it to
someone who wants it (if you're lucky, you can sometimes charge a
premium also). Make sure that there are no bars to
doing this, such as onerous obligations on you or the incoming
tenant. You don't want to be stuck with a property you can't
get rid of until the end of the term or the next break.
Dilapidations:
The ultimate irritation is, having finished your occupation of a
property and believing you are now free of any continuing
obligation, receiving a bill for repairs and redecoration, if
everything is not to the landlord's surveyor's satisfaction.
Dilapidations can run to many thousands of pounds if you have not
prepared thoroughly. The best advice would be to consult your
surveyor prior to leaving the property to take advice on how to
minimise your liability into the future.
CRC/ EPC:
There are a new set of rules about to come into place regarding
the Carbon Reduction Commitment. Buildings over a certain
size will need to be registered for the CRC scheme… and this can be
expensive for the tenants if you haven't done your homework.
Be aware of large buildings that perform badly on the Energy
Performance Certificate, as these are likely to be worst hit.
Registration:
If your lease will run for more than 7 years, you will have to
register it at the Land Registry. This requires a bit of
extra admin (and therefore cost), and also a registration fee of
anywhere between £50 and £500 at the Land Registry. If you
don't register the lease, you could get a nasty surprise if the
property is sold - the new owner may be able to summarily get rid
of you.
Rent Review:
This is where cash can really start slipping through your
fingers. If you have a bad rent review clause, a landlord can
end up getting much more rent out of you than is fair or
equitable. An example of this is landlord's taking into
consideration your reputation when calculating the rent review
(unfairly inflating the rent) or creating assumptions that your
property is larger than it really is, or even that it is in a
different location! This can be catastrophic for rents and
therefore for your business.
Repairs:
Most leases ask you to "keep" a property in good repair - what
they don't explicitly say (but they do mean) is that you must also
"put" it in good repair. So if you're taking on a bit of a
wreck of a building or property, if you're not careful, you may
have to repair it and put it into tip top condition at your own
expense. If you're not happy with the state of a building,
get a schedule of condition and have the lease refer to this -
rather than giving an open ended promise to improve the
property.
Service Charge:
If you're taking on a lease of part of a buildling, chances are
you'll be contributing towards the upkeep of the whole.
Unlike in residential leases, there's no requirement for the
landlord to consult you or act reasonably when getting works
done. Make sure therefore you're happy with the terms of the
service charge provisions before you sign up. If you have
cause for concern, you can sometimes agree a cap on the service
charge which will protect you from wild variations in the amounts
asked for.
Survey:
To protect yourself from the worst excesses of the repair and
service charge problems above, it is always prudent to get a survey
of a property before you take on a lease. This will give you
very valuable insights into what may be needed in the building in
years to come. A survey can put you in a very strong
negotiating position.
Use:
Nowhere in most leases does it say that the use for which you're
taking the property is approved by the local authority. You
should therefore always ensure that you have the relevant planning
permission for your intended use. Worst case scenario could
be you taking a lease for a number of years and being unable to use
the property.
Whilst there's no silver bullet to ensure you get a perfect
lease, you need to be alert during the initial negotiations with
the agents or the landlord. After that, your solicitor needs
to ensure that the bones of the agreement are faithfully put into
the format of the official lease.