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What to Consider When Renting a Commercial Property

What to Consider When Renting a Commercial Property

By In Blog, Commercial Conveyancing On 04/02/2021


There’s a lot to consider when renting a commercial property. This doesn’t just extend to the look and space of the premises; you need to be aware of any hidden costs and legal restrictions too. This could make all the difference to the success of your business venture.

Things to consider before you rent a commercial property

Whether you want to move into your first commercial property, or you are thinking of moving to a new business premises, there are some important factors to consider before you sign on the dotted line.

Does the commercial property fit your needs?

The first is whether or not the commercial property fits the needs of your business – both now and in the not-too-distant future. Commercial leases often last for at least five years, while some will tie you in for as much as 25 years. So, your decision has to be future-proof. You need to anticipate whether your business might expand (or even decrease) in terms of manpower or operations. This will dictate exactly what kind of space and facilities you require.

Does it have the right use class?

You also need to be sure that the property has the correct use class attached to it. Both in terms of what the landlord will allow and also the planning use. Although the planning restrictions were significantly relaxed in 2020, they still do need to be checked to ensure your use is allowed.

Are there any hidden costs?

You probably have a budget in mind in terms of how much you want to spend. However, it’s not just the rent that you’ll be liable for. (Which, by the way, can increase following a rent review, which the landlord will almost certainly include in the lease). You may also face other costs such as VAT, utility bills, service charge, insurance and business rates. If you fail to factor these costs into your budget, you may quickly find yourself financially stretched.

What are the tenant obligations?

Both commercial landlords and commercial tenants have obligations. Some of these are set out in law, while others are determined by the terms of the lease. Check whether there are any particularly onerous responsibilities that are expected of you. Issues commonly relate to repair obligations or dilapidations. Sometimes, these require that you leave the building in a better condition than when you found it. This might make you think twice about whether or not to proceed.

How much flexibility do you have?

Businesses do not always go according to plan. They may perform worse than expected – or they may even grow at an exponential rate. Because of this, it helps to have a degree of flexibility. It can be comforting to know that you can sublet the premises if needed, or transfer the lease (known as ‘assignment’) if you ultimately want out. Break clauses may also be worked into the lease allowing you to terminate the lease early. If the terms are too restrictive, this could be a deal-breaker for you.

Are there any other inconveniences?

And what about any other inconveniences that could affect your day-to-day operations? Some commercial properties have restricted working hours, meaning you can’t enter the property at certain times of the day. Others have access issues or limited parking/transport links. Alternatively, it could be that a new development is being built nearby, which could disrupt you, your staff or your customers.

What else does the small print say?

When you rent a commercial property, you will enter into a commercial lease with the landlord. These are always complicated documents that are full of legalese. They are also produced by the landlord, meaning the terms rarely favour the tenant. You need to go through the small print to ensure you are not signing a contract that you later regret. You can always negotiate the terms – or ask a solicitor to negotiate on your behalf.

Commercial property solicitors – Sunderland solicitors

If you are about to rent a commercial property, we can help. We can review the terms of the lease and advise whether there are any clauses that could be a cause for concern. If you want, we can then negotiate on your behalf, securing a favourable contract that protects the interests of you and your business.

Call us on 0191 567 7244 and we’ll be happy to help you. 

If you would rather contact us online, email us at info@cooklaw.co.uk and one of our team will be in contact with you shortly.


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