Simeon Clipstone is a Partner and Head of Commercial Property at Neves Solicitors. Here he explains commercial property leases.
Would you sit down with your family perhaps at Christmas or another public holiday and try to play a board game like Cluedo or Monopoly without knowing the rules of the game? Not just a board game but an interactive Xbox or PlayStation game?
You will always struggle to survive in a game unless you know the rules you are required to play to. As with board games or electronic games so also with business and commercial property.
Would you enter into a lease of a commercial property without fully understanding the lease and the rules which will govern your use and enjoyment of the property and the costs associated?
Many people agree a lease for a shop, restaurant, an office, a warehouse or a factory having budgeted to afford the headline rent but there are other charges they need to be aware of and many other implications and obligations contained in the lease, just like the rules of the board game.
In addition to the rent there might be rates, there might be insurance and there will almost certainly be some potentially very expensive obligations to maintain and repair the building.
These can be qualified or capped with careful negotiation when you are entering into the lease.
Often the landlord will insist that you put down a deposit known as a Rent Deposit Bond as extra security to make sure you pay the rent and other sums due under the lease.
Equally that Rent Deposit Bond needs to be carefully reviewed and negotiated to ensure that you are likely to get your money back at some point having complied with your other obligations in the lease.
The board game might have an ultimate termination when you win or lose the game and equally the lease of commercial property has an end of term agreed.
At that end of term you might want to renew the lease and take on a new lease of the same property if your business is thriving and you need to remain in that location to preserve your goodwill (such as a High Street property for a retail use).
This is governed by something called the Landlord and Tenant Act 1954 and careful negotiation is required to ensure you have the best chance of benefiting from the protection of that Act or at the very least enjoying some sort of compensation if a new Lease has been denied you.
Equally there may be some dilapidation claims that the landlord wishes to follow at the end of the lease and to avoid a costly settlement being due to the landlord steps should be taken in the negotiation of the lease to offer you the best protection.
At the very least you should only be maintaining the property in the condition you find it rather than improving upon it at your cost to the benefit of the landlord.
At Neves we can help you understand the rules of commercial property and the steps needed to be taken to negotiate a fair and reasonable lease and, if necessary, a Rent Deposit Bond which protects both the landlord and the tenant fairly and openly.
Give Simeon a call at Neves Solicitors on 01908 304560.