Many people who run their own business from home get to a point where they need to consider renting a commercial property to continue to grow.
Jennifer McGowan, commercial property solicitor at Birchall Blackburn Law, answers some frequently asked questions.
I’m thinking of renting a commercial property. Do I need to sign up to a long-term lease?
The key terms of any lease must be carefully considered and negotiated to ensure that once drafted, the lease achieves the desired objectives of the parties. The length of a lease is one of many terms that would need to be negotiated between the parties at an early a stage in the proceedings as possible.
Why is a lease useful?
Typically, a lease is a lengthy document which aims to identify all key issues surrounding the occupation of commercial premises. It should leave no doubt as to each party’s responsibilities and obligations. Furthermore, a lease will almost certainly offer more protection and security than other types of occupational arrangements, such as licences.
What else does a commercial lease cover?
A commercial lease will contain detailed provisions relating to all manner of issues. The main one is, of course, the amount of rent that must be paid and when those payments are due. However, a lease will quite often also set out the arrangements regarding such matters as: how often rent reviews take place (if at all), your repair and maintenance obligations, what physical changes you can make to the building and what happens in the event of non-payment of rent.
I still want to have more flexibility than a lease offers. Is there another option?
Some properties aimed at start-ups and small businesses, for example serviced office space or pop-up shops, may offer a licence to occupy instead of a lease. A licence to occupy is simply permission for you to use the property. There would be no right of renewal for a licensee at the end of the licensed contract period, which is usually relatively short.
What should I do next?
Never enter any legal agreement without first seeking specialist advice. Doing so could prove very costly to you personally, or to your business.