The Business Exchange Swindon & Wiltshire Edition 21: Oct/Nov 2015 - Page 23

COMMERCIAL PROPERTY NEGOTIATING A NEW LEASE Having identified the right property for your business, you’d be forgiven for thinking the hard work is over when in fact, it has only just begun. This is the point at which the real fun starts as landlord and tenant try to agree terms – or at least find a compromise which is palatable to both of them. Greg’s tips for Lease Negotiation • Heads of terms are produced by the agent. It’s important • It is worth trying to negotiate a rent free period Greg Callard, solicitor, Withy King Greg Callard, a solicitor in the commercial property team at Withy King in Swindon, says it’s important not to be too quick to make verbal agreements, avoiding renegotiations and potential conflicts further down the line. Greg provides pointers to prospective tenants who are about to start negotiating headline terms. that these terms are fully negotiated before the landlord’s solicitor starts drawing up the legal documents, to avoid problems later on. • Give careful thought to the length of the lease. Too long and you may have to try and negotiate yourself out of the lease or sub-let the property if you need to move earlier. Too short and there is no guarantee that the landlord will renew which means you may have to move sooner than you would like. • A break clause will allow you to bring the lease to an end early, should you need to relocate, upsize or downsize. • As well as the headline rent, other costs are often referred to and included as rent in the lease, such as service charges, insurance and utility costs. Check if the landlord charges VAT as this may affect your cash flow. particularly if you are fitting out the property and don’t want to pay rent until you actually move in. • The landlord will want to be able to review the rent. Consider the frequency of these reviews so you can plan financially. • Most leases are fully repairing. This may oblige the tenant to hand the property back in a better condition than when they took it over. Try to limit your repairing obligation to the current condition of the property. • If you need to undertake fit out works, make sure that full plans and specifications are available so the landlord can agree them during the negotiation process, avoiding potential delays later on. To find out more about negotiating your lease or for any other property-related enquiry, please contact Greg Callard or another member of the team on 01793 847777 or visit www.withyking.co.uk If you are starting to climb the ladder or are a few rungs up and wanting to grow your property portfolio. Contact Martin & Co today to book your free, honest, no obligation appraisal. Whether you are on the top or bottom step, Martin & Co can help maximise your investment opportunity. Martin & Co Swindon 108 Commercial Road, Swindon, Wiltshire SN1 5PL 01793 487760 swindon.martinco.com swindon@martinco.com THE BUSINESS EXCHANGE 2015 23