Need Premises For Your Business But Don’t Want To Throw Away Your Profit? What To Do BeforeSigning a Lease
At Pop Up Business School we show people how to grow a business with no money - however, for some businesses they will need a property.
Maybe you started your business from home and it has grown and you now need a property - What do you do?
Check out our latest blog from Kirsty Harvey (www.ktdsurveying.co.uk)
You have had the idea, now you need premises to start the business. Signing a lease is a big
commitment, so you need to be sure you have the best deal you can. Before you sign on the dotted
line, just think about this:
1. The key to everything is NEGOTIATION – you can do this yourself but like anything if you have
expert advice you will reap the benefits.
2. Make sure you know whether or not the lease has SECURITY OF TENURE. If it hasn’t, (and is
CONTRACTED OUT) you need to factor this into the rent. Also be aware that at the end of the
lease if the landlord wants you out, you have no right to stay. Your negotiating position at the
end of a contracted out lease is much less than one that isn’t.
3. Ask for a RENT FREE PERIOD before signing a lease. This is common practice, and the longer the
lease, usually the longer the rent free period granted.
4. NEGOTIATE THE RENT. Rent that you pay will be used as evidence against other businesses
when they have a rent review or lease renewal, and vice versa. The more that tenants negotiate
the better it is for all businesses in keeping rents down.
5. BUSINESS RATES: Make sure you factor in this cost. Look at the possibility of appealing the
rateable value. Be careful though as rates can be revised upwards as well as downwards. Can
you get any small business rates relief?
6. SERVICE CHARGE: Before completing a lease, check if there is a service charge. What does
it cover, and will you benefit from those services? If not don’t agree to that part of it. Is
the building already in a poor condition? If so you should agree a cap on the service charge
provision. This way you know your service charge will be a fixed maximum amount.
7. BUILDINGS INSURANCE: Is buildings insurance the landlord’s responsibility, and if so check how
that will be charged under the lease. If you are part of a bigger property, you don’t want to be
paying extra because another tenant is a high risk user.
8. REPAIR COSTS: Have you factored in costs for repairing the building? You may be taking on
responsibility for putting the property into good repair and this could include major works, such
as repairing the roof. Agree a Schedule of Condition with the lease as this limits your liability. A
small initial outlay could save you thousands of pounds at the end of the lease.
9. RENT REVIEW: If the lease is going to have a rent review, make sure the rent review clause is a
fair one. You don’t want to find assumptions in it that will artificially inflate your rent at the rent