Lawyers Reading

Reading Commercial Property & Business Lease tips

Is it better to rent or lease a commercial property ?

The answer all hinges on how much you have to spend, how young or old your business is and your attitude towards risk – you do not want to make a big investment where you are unsure of the viability of your business in the long run.  With that said, it is usually cheaper to buy a property in the long-run.  However, buying a property provides you with less flexibility.  If your business enjoys explosive growth, you may find that your business will outgrow the premises.  It pays to use a cost-benefit analysis both in the short and long term when coming to a decision.

What things should I consider before signing a lease ?

You should consider whether:

• The premises will be large enough for your business in the foreseeable future.
• The lease is negotiable – in the current economic climate, it is quite easy to find a bargain as commercial property landlords are literally desperate to have their property filled.
• The premises have the facilities you need, such as parking for customers, toilets for both customers and staff, a staff kitchen etc.
• You have properly considered all your obligations under the lease.  For example, you might want to consider whether you will be responsible for restoring the property to it’s original condition after the lease has expired; whether you will have to pay service charges and whether the property will be subject to a rent review.

Do I need a solicitor to look at the lease prior to signing it ?

Commercial property forms a large part of a business’s expenditure.  It is therefore extremely prudent to have a solicitor look over your lease to make sure:

• You are aware of all your obligations under the lease
• You are aware of the landlord’s obligations under the lease
• The lease is legal
• The property is right for your business and your business needs

Through an experienced commercial property solicitor, you might discover that there is some scope for negotiation in the lease, and we will be able to advise you as to where this is possible and negotiate on your behalf.

Many of our services can be offered on a fixed fee basis.  When you consider this and the risk involved, it makes good financial sense to seek legal advice.

What is rent review clause ?

A rent review clause is a clause in the lease that allows the landlord to periodically review (usually every five years) how much rent is paid by the tenant.  In our experience, rent review clauses are negotiable so you can place a cap on how much the rent will go up should a rent review take place.