Signing a business property lease
Remember that a lease is a legally binding document, so before you sign it make sure you understand every single word and phrase included in it. See our article on
understanding property contract terms for some definitions, but seek advice from a Chartered Surveyor, a Solicitor or a Licensed Conveyancer before you sign.
Suitability and fitness for purpose
Find out who's responsible for:
- Internal and external maintenance and repair
- Ensuring the building meets fire, and health and safety regulations
- Insuring the building and contents
- Making sure the premises has the right classification of use for your business
- Making sure the premises meets the access requirements of the Disability Discrimination Act
Costs and charges
Do you know exactly what's included in the costs, and have you agreed them in writing? Think about:
- How much is the rent, and when will it be renewed
- When will the rent need to be paid (weekly, monthly, quarterly) and is it paid in advance or in arrears
- How can rent be paid. Cash, cheque, paypal, direct debit/standing order, BACS transfer
- Is there a deposit to pay. If so how much, and is it refunded at the end of the tenancy
- Does the rent include rates, if not how much are these
- Does the rent include any building insurance or other insurances
- Are service and maintenance charges included. Does this include cleaning
- Are any shared services such as parking, security, reception staff included. If not how much are these
- Are utilities (gas electric, water, phone/communication lines, air conditioning) included
- Are you able to sub-let any of the space
- If it’s a long-term arrangement are there any break clauses so you can consider whether to continue with the arrangement
- Is this a fixed term lease? Check what happens if you cease trading
Renewing the lease
The Landlords and Tenant Act 1954 states that, at the end of the agreement, you have the right to stay in the premises and renew your tenancy, provided you've not breached the terms of the agreement. Take a look at the
Code for Leasing Business Premises in England and Wales for more information.
You may be asked to ‘opt out’ of adopting the Act but seek expert advice before you agree otherwise you'll be giving up these rights.