FAQ: New Commercial Property
I am considering setting up business on my own for the first time. What are the most important factors for me to consider when looking for commercial premises to rent?
Renting commercial premises can be a minefield for the unwary and it is vital that proper advice is taken from the outset to avoid unexpected surprises and expense during the term of the lease. Some of the more important matters to consider are as follows:
1. The Premises
Whilst this may seem an obvious point, make sure that the premises will be suitable for your business in terms of location. If you will be reliant on passing trade, premises off the beaten track will not earn you a living. We can put you in touch with a number of commercial agents who can show you a selection of properties their clients have to rent.
2. The deal itself
Once you have found your ideal property, do not just sign the first set of Particulars which the Agent produces. We can advise you on these and ensure that they meet your needs before they are signed and solicitors formally instructed.
3. Budgeting for the transaction
If you have no trading history, a landlord may request a rental bond. This is typically equivalent to 3 to 6 months rent. Also enquire whether VAT is payable on the rent. If it is, and you are not VAT registered, this will immediately add 20% of costs to your bottom line. The rental bond and and stamp duty will also increase by 20%.
4. The Use and Condition of the Premises
Whilst solicitors will check this point for use, make initial enquiries with the Local Authority to ensure that the premises have planning consent for what you want to use them for. Otherwise, you will need to apply for a change of planning use.
Of critical importance is the need to employ a surveyor to inspect the condition of the premises. We can recommend a surveyor to you and then, based on the survey, ensure that the lease is drafted so you are not exposed to unnecessary risks and expenses.
5. The lease itself
These are often intricate and complicated documents and it is vital that proper advice is taken before putting pen to paper. We will advise you on all aspects of the lease, and carry out all necessary searches and enquiries, so that you can sign your lease with confidence and focus on running your new business. Good luck!