Should You Lease A Commercial Property?

When you lease a commercial property, it means that you are a ‘tenant’. Your business rents the commercial premises from the landlord. The commercial property lease will give your business the legal right to use the property in question, for the time laid out in the contract. The lease will also outline the agreed rent cost. In addition, it will confirm the responsibilities of both parties.

There are pros and cons to leasing a commercial property for your business. These are things that you should consider before you lease a commercial property. Our commercial property solicitors have laid them out below for you. However, you can give us a call. We will talk through your business and offer guidance on the best decision for your unique situation.

When you lease a commercial property, you will be opting for a fixed rental rate. This will give you certainty over your general cash flow. You will also have a greater availability of funds available due to lower initial start-up costs. Any maintenance or repair costs can be minimised too as these are likely to be covered by the landlord.

There is a potential for negotiating rental terms to give your business more opportunities too. You will also have the benefit of a short-term lease or a longer lease with a break clause. This is ideal in the case of having to relocate, upsize or downsize the business. It is also easier to find the right rental commercial property as many are leased rather than sold.

So, they are reasons that you should lease a commercial property. However, there are reasons why you might want to think a little more carefully about leasing a commercial property.

For example, you may find that Heads of Terms tend to be more focused on the landlord. Hiring one of our commercial property lawyers to review the lease before you sign it will help to ensure that you are protected. You may also find that there are restrictions on the alterations that you may want to make to the premises for your business.

There are times when the market value of the property can increase. At times like this you may find that leasing the commercial premises becomes more expensive. This is because rent reviews tend to be ‘upward only’. As a tenant you will also have a service charge to pay. This will cover things like the internal maintenance and common areas. It is highly recommended that you agree on a service charge cap before signing the lease.

As a business owner, you do not own the commercial premises. This means that there is a lack of long-term stability. For example, the landlord may refuse to renew the lease or sell the commercial property. You will also find that the property needs to be returned in its original state. This is why it is highly recommended that a commercial property law expert, like our team, review and negotiate the schedule of conditions to help avoid these issues.

Call our commercial property legal experts in Peterborough now to help with the success of your business and commercial property plans.