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If you are a business or commercial enterprise looking to take lease of a property, especially if you have limited resources, it can be very tempting to just sign up to what is offered by a landlord. The cost of professional advice, agency, building survey and legal fees can seem disproportionate.
After all, it’s just a three- or five-year lease for £10,000 a year. What could go wrong?
The answer is a lot.
There are real risks that mean you may take on liabilities you did not know about, which in some instances could have a very serious effect on your future and your business. Here are three key things to think about.
Get a survey
You wouldn’t buy a home without a survey, so don’t lease a property without one. However good the lease contract its, if you lease defective premises, you could end up with something expensive and unusable.
Don’t accept a repair obligation if the premises are not in pristine condition
If you take on a full repair duty, the landlord can make you upgrade the property or at the end of the lease, seek a large sum of money to rectify your breach. That is your failure to repair to an original fantasy repair standard. Get a shred of condition into the lease showing the starting standard of the property.
Service charges
In multi-tenanted buildings service charge costs, including repair of the larger building, will often dwarf direct repair and upkeep costs of your premises. If the building is not in good shape, negotiate a cap on liability or at least key exclusions around, say, a bad roof, crumbling stonework or lifts that will soon need to be replaced.
Two more things to consider!
Energy performance: Regulations in England require the upgrade of EPC G and F buildings, even if they are let. If you have a lease and those costs are not carved out, they may be headed your way directly or via a very large service charge shock!
Jurisdiction: Don’t assume Scotland as the same or nearly the same as England!
The above was taken from our video series, “90 seconds with a gunnercooke expert”. You wan watch Simon’s episode here.
Contact Simon or read more about his practice here.
