Property leasing – the basics
Jan 27 2005
In general, when you have signed a lease for work premises, this is no different from entering into any other type of contract. Once you have signed a lease, it can be difficult to break. If you require any flexibility to be taken into account, it’s important to set this out from the start, and to negotiate before you enter into any agreement. Committing to leasing premises requires careful planning and you need to consider what your business plans will be for the long-term.
“Ensure the premises you have chosen are in the right location, with flexibility that suits your business. The chances are, your business will grow faster than you think, so it’s a good idea to account for this happening in the lease. Most leases nowadays are for a minimum term of three years – if you are taking on premises that suit you now, make sure you have break options added,” advises Eddie Coxon, partner at solicitors Dixon Webb.
He adds that you must ensure you don’t get bullied into signing a long lease, and that you should establish ongoing liabilities that may be attached to the premises.
“If you take on a lease for a year, don’t sign up for total liability for repairs. You don’t, for example, want to pay for roof repairs if you have only been there for a short time. And make sure the rent reflects reality – you could find a property that is not worth a good deal, but the rent reviews could be expensive,” comments Coxon.
If you don’t have any break options in your contract, Coxon suggests that you should make sure you have the right to sublet the premises to a third party. He adds that it can be more difficult to negotiate the terms of a lease if you, as the tenant, have taken over an existing one.
“In this case, the tenant is limited in terms of negotiation, and you have to ensure that you will not be saddled with any liabilities from the previous tenant.
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(27/1/05)
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