This New Year are you considering a new business lease?  If so, here are some key things you should consider discussing with your commercial lawyer:

Length of lease.

Leases can typically last five years. If this is too much of a commitment, tenants need to make sure that they can assign the premises to another business during this time or have…

A break clause.

This allows you to get out of a lease early if needed.

Repair clause and Dilapidations.

It is key to negotiate the repair clause very carefully. A tenant taking a short lease does not want to agree to be responsible for repairing the roof or structure of a building.

Room for growth

Before taking space, check if the landlord will rent out by floor so when your business grows, your office space can too.

Technology

There are lots of old buildings so check whether the premises have up-to-date infrastructure for your needs; for example, raised floors for sockets, suspended ceilings for cabling as well as the speed and adaptability of broadband and other key technology.

User clause

Leases normally have clauses that specify the type of activity the tenant can carry out in the premises. For example, if a restaurant starts to engage in online sales with food items being collected from the shop, this may well break the clause, unless provision for a future change of use was included in the lease when it was negotiated at the start. You must also check the building has the correct planning use.

Spread the cost

Some businesses may want to share commercial premises with another tenant to spread the cost. It’s worth checking if part of the space can be sub-let. Contact a local business organisation to see if it has (or could develop) an online forum, whereby businesses can talk to each other about sharing or swapping premises.

Forfeiture

Forfeiture allows a landlord to bring a lease to an end if a leaseholder defaults on any of the terms. It is frequently used by landlords to terminate commercial leases, but it is not always the best option for them or the tenant. Claims for financial loss by a tenant are a possibility if a lease is terminated in the wrong way. The tenant might be eligible to bring a claim for unlawful forfeiture and can pursue compensation for the losses arising from their exclusion from the premises.

Minimum energy efficiency standards

In 2015, energy efficiency regulations set out minimum energy efficiency standards for England and Wales.

From 1 April 2018 these regulations make it unlawful for landlords to grant a new lease of properties that have an energy performance certificate rating below E. Tenants should check with landlords what building work may be planned to make the building fit for purpose and whether renting out a new floor or area is a possibility to avoid disruption.

After 31 March 2023, existing leases of premises rated E or below could load upgrade costs on to unwitting tenants. Seek advice from a lawyer and surveyor if you’re a tenant and have concerns in this area.

Gideon Cristofoli, Senior Partner and Head of Business at Bookers & Bolton Solicitors, has over 24 years experience in commercial law.  Call him today on 01420 82881 or email enquiries@bookersandbolton.co.uk and make sure you are covered.