Steps to take when looking for a new commercial property
At QualitySolicitors, we understand that moving premises can be a stressful and daunting task for SMEs, so we’ve created some top tips on what to consider when going through this process …
Know what you want
Think about what you really want out of your workspace before you start looking for a property – be it location, price or space – and draw up a list in priority order. This will enable you to be more efficient on your search and better negotiate the terms of your occupancy. More information and advice on finding the right property can be found here.
Negotiate rent terms
Some landlords are willing to compromise on rent to secure a new tenant, especially if the building has been empty for a while or is in a less desirable postcode. Take this opportunity to negotiate a reduced rent or to limit any increase at your rent review. If your landlord is not willing to budge on this, request a rent-free period at the start of the lease. This will allow your business to settle in and fit out and will relieve your landlord of having to pay business rates on an empty property.
Flexibility is key
The standard length of a commercial lease is between 5-10 years; if you think this is too long, you should try to negotiate a break clause. This will give your business the flexibility to be able to grow, restructure or re-locate if needed.
Request lease renewal
Many leases give you the right to renew, but you will need to stipulate this during negotiations. If your landlord is refusing to renew your lease, you should take legal advice.
Be clear on what you are paying for
Make sure you are clear on what costs are included in your lease and when payment is due. Try to steer away from committing to repair works as this can end up costing money in the long run. Likewise, if the property is not in good condition when you move in, make sure you record its state in a schedule of condition so you are not liable for repairs when you leave. You should also take business rates into consideration when you are calculating costs, as you will be required to pay them and they can be very expensive.
Get a second opinion
It’s worth instructing a good professional team which is made up of a surveyor and a solicitor to give you practical advice along the way and help speed up the process. Investing in an electrical survey or asbestos report from the outset can also protect you from significant risks and will improve your bargaining power in the future.
Check planning permission
Make sure to confirm the premises have the right category of planning permission for what you want to use it for. If in doubt, a solicitor will be able to check this as part of the routine searches involved in the commercial property conveyancing process.
Read the small print
Always check your lease thoroughly before signing anything, or better still get a professional to read this for you. This will ensure you avoid any pitfalls such as being liable for expensive repairs or getting trapped in an inflexible agreement.
Checking existing exit terms
If you are planning on relocating, make sure you check the exit terms on this property, such as what notice you need to give and what you need to do before you leave. You should carefully plan and co-ordinate one move to another to avoid paying additional costs.