Premises are often one of both the largest liabilities and assets of a business. With this in mind, we can assist you with all of your property needs, whether you are looking to buy or take a lease of a property. We tailor our services to suit your requirements and so can assist as much or as little as you need. Whether you require a detailed investigation into the property or simply a review of a lease, we can support you through the process of acquiring the property your business needs.
We have a guide for tenants looking to take a lease of new space which we are able to send on request but here are some of the key things you may like to consider:
(a) Repair – what state of repair is the Property in?
A property needs to be fit for purpose and if it isn’t you may find that you won’t be able to run your business from it. It may be necessary to carry out a survey at an early stage as if you are to take a “full repairing lease” then the Landlord will expect you to not only keep the property in full repair but also put it in to full repair at your cost even if it isn’t. It may be possible to limit any repair liability by reference to a photographic “schedule of condition”.
(b) Rent/Costs – what do I need to pay and can I afford it?
On top of rent, service charge and insurance costs, you should also factor in non-domestic rates and any other costs you may need to spend to ensure the property is suitable for your needs (such as fitting out costs). Where a tenant has no or very little trading history a landlord may also require a rent deposit on completion which can be held by a landlord for the duration of the term of the lease. Also bear in mind the rent may be subject to review after a time.
(c) Term – how long are you likely to need the property and do you need flexibility on this?
If acquiring a lease you should consider how long you would like the lease to run for. If you need flexibility you may like to consider whether the Landlord will accept a tenant break right after a set period of time.
Apart from your solicitor’s fees and VAT (which will depend on what level of service you require), the other key additional expenses are:
(a) Search/enquiry fees – these can take up to 3 or 4 weeks to obtain but they help provide a fuller picture of the Property, its past and whether there could be any problems/concerns regarding its use/occupation. As a rough guide, a full package of searches can cost in the region of £700-£800.
(b) Registration fees – any lease granted for a term of over 7 years will need to be registered with the Land Registry – the lease would then acquire its own title number. The fees for registering a lease of over 7 years are dependent on the level of rent payable. For example, when the rent in the first five years of the term is no more than £80,000 (inclusive of VAT) per year, the registration fee is £40.
(c) Stamp Duty Land Tax may also need to be paid. The amount payable is determined by the amount of rent payable over the term of the lease. We will be able to advise you early on whether this will affect you but as a rough guide a lease of 5 years with an annual rent of £50,000 plus VAT will result in £1,209 of SDLT being payable.
This depends on a number of things but if you would just like us to simply report on the terms of a proposed lease, this could be turned around in a week or two. If you require a fuller investigation into the property or if you would like us to negotiate the lease on your behalf, then this could take closer to 4 to 6 weeks. If you are taking an underlease (a lease deriving from an existing lease) then this could take anywhere between 4 to 8 weeks as third party consents are likely to be required. Delays can often also be experienced where mortgagee consent is required before a lease can be granted.
Security of tenure means that a tenant occupying premises for its business purposes has in certain circumstances got a statutory right to renew its lease. The Landlord only has limited grounds on which to object to any request for a new lease. Not all landlords will be happy for their tenants to have this security and so the parties can agree to exclude this right from the lease – if this is the case then a formal procedure needs to be followed when the lease is entered into and this will mean that the Tenant must leave the property at the end of the lease term unless the Landlord chooses to offer a new lease.