It’s many people’s dream to start their own business – who wouldn’t want to work for themselves? But the realities of actually renting a business premises can be difficult to navigate. Over the years, I’ve seen people unnecessarily trip up on these stumbling blocks because they weren’t aware of the facts. But they’re easy to avoid if you know how, or have someone who can offer you quality guidance through the process. Let’s take a brief look at the key points that you might have to consider when leasing a commercial property.

Firstly, it’s important to understand that leasing a property for business is completely different from renting residential property. You may have rented a house or flat before, but a commercial landlord is unlikely to offer you the same rights or obligations that you will have enjoyed with a residential landlord. For example, when renting a home, you’re not expected to know about safety regulations or property maintenance – all that’s really required is to pay rent, keep the place tidy and contact the landlord if something goes wrong. In contrast, when renting a commercial property, the landlord is not expected to know how the tenant plans to operate, the temporary alterations they might carry out, or the regulations that will apply to their particular trade. The tenant is regarded as a business that should be capable of managing their own operations.

It might seem obvious but it’s vital to check what kind of business you can use the premises for. It’s always a good idea to try to add an element of flexibility into the contract if you can see yourself wanting to make changes to your business plan in the future. For instance, you might open a hair salon and want to add a nail bar at a later date.

However, there are tight rules about what kind of businesses can be run where, so no matter the flexibility of your lease, you must also obtain the correct planning permission to run that type of business.  Another key point to consider in maintenance and repairs – who is responsible? While the Commercial Lease Code recommends that your obligation for repairs should be limited, this code of conduct is not always followed. Some landlords will want to give you full responsibility for keeping the property in a good condition and make you liable for carrying out any repairs as and when necessary. If you’re lucky enough to have a lease where the responsibilities lie with the landlord, it’s important to establish an agreement with them about how long it should take them to make these repairs.

Finally, before signing your lease, it’s critical to consider the length of time you’re signing up for and how easy it will be to get out of. Things can change quickly in the business world, especially if you’re starting a small business, so it would be inadvisable to sign a long-term lease – as tempting as it may be! I would recommend signing a lease for no more than 3-5 years at the most. Also, if you can, try to work a break clause into your contract – this can give you the chance to end your lease early should you need to. If this isn’t an option, you should discuss the right to pass your lease onto another party, though some landlords may want you to provide a guarantee that holds you responsible if the new tenant fails to pay their rent.

While renting a commercial property may seem like murky waters, if you have carefully considered each of these basic points it should be easy to rent your business premises with success and full assurance. The key to establishing a lease that both you and your landlord are happy with is to take a pragmatic approach when drafting it. It’s important to remember that whilst you may be opening your business, you ARE the landlord’s business and they want to cover themselves and their business for the future in the same way that you do – so be prepared to make some compromises. If you’re still unsure on any terms, don’t hesitate to seek the advice of a legal professional so that you’re able to proceed with a full understanding. After all, the process of opening your business is an exciting time and you want to be able to navigate each and every step of it with complete confidence.

 

Property Expert, Laurence Cox has been at the forefront of the property market since 1988.