Menu

5 tips for negotiating a commercial lease

Moving business premises or taking the step of leasing commercial property for the first time can be a big occasion in any business’ life cycle. Although an exciting stage, the obligations of commercial property leases should be kept front of mind; commercial leases often last for a number of years and come with a series of legally binding commitments.

With the right advice, it is possible to avoid the common pitfalls associated with commercial leases, therefore being able to secure a deal that’s right for your business. Here are our tips on how to achieve this.

1. Do your research

Finding the right commercial premises can be an uphill battle, with a long list of criteria including location, size, transport links and parking to consider. If you come across somewhere that you think will be suitable, avoiding the temptation to rush in can be difficult.  

If possible, take your time to thoroughly investigate the property and its surrounds. This may include visiting at both peak and quiet times, viewing the property on multiple occasions and arranging to speak to other occupiers in the development or building for their insight on being based there.

2. Try for a rent free period

Most landlords will be reluctant to discount on the ongoing rent, however, there is often some flexibility during the initial period of rent, particularly if the property requires renovation or fit out.  

3. Have a Schedule of Condition undertaken

Before signing a lease, it is advisable to have a Schedule of Condition undertaken by a Chartered Surveyor. This is a record for both parties that formally documents the state of the property’s repair at the time the lease started. This essential step can significantly reduce your dilapidations liability when the lease comes to an end. With regard to dilapidations, although you might expect that you would only be required to return a property to the condition it was in when you first entered into the lease, this isn’t necessarily the case!

4. Beware of dilapidations liabilities

Being unaware of the extent of their repair liabilities is where many tenants get into trouble. In addition to having a responsibility to return the property in a certain condition at the end of the lease, the same can also apply throughout the entire course of the lease, or at specific points, called ‘breaks’.

It’s worth pointing out that repair work on commercial properties can extend to all aspects of the property, not just its internal fabric, but also items including its roof, services and any external grounds. Works to commercial property often doesn’t come cheap, and liability can very quickly spiral out of control if not managed properly.

Undertaking any significant alterations to the internal layout of the building can also result in tenants coming unstuck as some leases require the tenant to return the property to its original condition. Tenants that are unaware of this may find themselves having to return the property to its original condition at their own expense or risk being faced with a dilapidations bill.

5. Seek legal advice

There are other ways in which you can negotiate favourable terms in a commercial lease to allow as much flexibility as possible, and also restrict your own personal liability. A good commercial property solicitor will be able to provide sound advice in these areas.

For more advice on aspect of leasing a commercial property or to seek the services of one of our specialist commercial Building Surveyors, please contact us.

BACK TO NEWS

“We had a Schedule of Condition carried out on a Commercial Property. From vacant possession to our proposed completion date we were really tight on time. Gary managed to carry out the inspection and write a very thorough report in the time needed to ensure we hit our completion date. The price of the report was also extremely competitive. I would recommend Lea Hough to anyone looking for a Professional Surveyors with excellent service & communication at a competitive price.”

Danny Ambler - Fuse Contract Furniture, Blackburn