Commercial property in London
Can we help you with your office move?
Taking a commercial lease of business premises is a lot different from buying a residential property. With a house or a flat what you get from a legal standpoint is more or less standardised. When you negotiate a commercial lease, it's not quite the Wild West, but there is far more flexibility for a landlord to seek to impose quite unfair and one-sided obligations which you should avoid. We can elp protect you.
Useful topics
Offices
If you are about to rent offices for your business, there are some important points to bear in mind.
- Longer leases usually have rent reviews every five years. There are important assumptions which have to be spelt out carefully or you can pay too much rent after the 5th year.
- You should be free to sell your lease on to someone else if you need to move on before the term ends. However, you must make sure the landlord does not impose unrealistic conditions which any new tenant has to meet.
Lease suggestions
Don't accept personal liability
Don’t take premises in your personal name if you can at all avoid it. Use a company. If everything goes wrong the company goes bust not you. You can walk away. Companies can be set up for less than £100. If you have a business with several outlets, consider setting up a new company for each letting. That way one bad outlet can’t drag down the rest.
Offer a rent deposit
Especially if you use a new company, the Landlord will want some security that rent will be paid. The estate agents may ask for a personal guarantor. Refuse that – The days when directors guaranteed their companies leases are now history. They will certainly want a rent deposit of at least 3 months rent. They may try asking for anything up to a year’s rent. But unless they have you over a barrel for some reason, 6 months is the most you should agree to.
Get a 'cap' on your service charge
If you are in a building with other occupiers you may be required to pay a service charge to cover communal repairing and maintenance costs. But you should be careful in a short lease that you can’t be made to contribute to costs which are really for the benefit of the landlord’s capital value – e.g. replacement of the lift or the roof. You should either have such items excluded, or put a financial limit or ‘cap’ on what you can be asked to pay each year.