Ini al Considera ons for Commercial Tenants
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Moss Solicitors are delighted to welcome Jo Showan to their Commercial Property team. Jo is an experienced solicitor, with par cular exper se in commercial lease ma ers. Below, Jo highlights some of the key factors that commercial tenants should raise with the landlord (or their agent) before signing a lease. 1. Costs other than rent – tenants will usually have to pay various sums in addi on to the annual rent. For example, if the landlord has opted to tax the property, then rent will be VATable. If the lease contains an upwardsonly open market rent review, the rent will increase over its term. Tenants should include a realis c projec on of the rise into their business plan. If only part of a building is being leased, you may have to pay a service charge that covers maintenance of common areas; it is sensible to try and agree that this will be capped. Other common costs include business rates, buildings insurance and stamp duty land tax. 2. Repairing obliga ons – a lease of a whole building is o en full repairing and insuring,
making a tenant responsible for keeping the whole of the property in good repair. You may wish to seek to exclude the roof and structure from your obliga ons as these can be costly to repair/maintain. By including a (photographic) schedule of condi on in the lease, you can limit your repairing obliga ons to keeping the property in as good a state as you originally found it, meaning you will not be obliged to improve it. 3. Security of tenure – tenants may have a statutory right to renew their lease, but it can be excluded by agreement. If you want to operate out of the premises for longer than the ini al term, you should retain the statutory renewal right. This will prevent the landlord from refusing a new lease unless certain grounds apply, and this could be crucial to the longerterm future of your business. Moss Solicitors can guide you from the beginning of your nego a ons. Please contact Jo Showan j.showan@mosssolicitors.co.uk or Emma Machowska e.machowska@mosssolicitors.co.uk for more informa on.
Commercial Property • Freehold sales and purchases • Commercial leases • Acquisi on of rights and easements • Op on and overage agreements • Secured lending • Por olio management
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