Not that I want to give away all our advice
but I have copied/ pasted a short guide we send out to clients which I hope helps. The problem of being responsible for rent after you leave can easily be sorted by whats called an Authorised Guarantee Agreement- your solicitor can advise. Fees can be £1,500 + VAT plus a contribution to Landlords costs of about £750.00 so bear this in mind.
Wright & Wright GUIDE TO TAKING A LEASE
This guide has been prepared to give you a brief taster into the why’s and wherefore’s of taking on a commercial lease for your business.
We will provide you with a full and tailored commercial report during your matter but we hope that this will help to answer any initial questions you may have.
KEY POINTS ON TAKING A COMMERCIAL LEASE
Commercial leases are probably one of the most complex documents you will be involved in negotiating and there are very few ‘standard terms’. Each one has to be looked at carefully as there are many traps.
Here are just a few critical things to consider before you sign a commercial lease:
1. Planning
Just because the lease permits you to use the property for a particular purpose doesn’t mean that it has Planning Permission for that use. Unless there is clear proof that it has been used for the proposed purpose for at least 10 years, or the landlord can produce a Planning Permission, then you should not take the lease.
2. New lease or assignment of an existing lease
New leases are more straightforward whereas taking an assignment of an existing leases can mean delay in getting the landlord’ s consent and paying the landlord’s legal costs in doing this. Make sure you know which it is so you can budget and plan accordingly.
3. ‘Security of Tenure’
Most business tenants have the right to a new lease when their lease expires. However landlord’s may not want this and you need to be clear whether it is to be a ‘secure’ lease or one where your rights to renew are to be ‘excluded’ by the landlord serving a notice on you just before you are about to sign the lease. This can be important if you have built up a good business at the premises and you find that the landlord can force you to move at the end of the lease.
4. Commercial Issues
You need to be certain you have agreed, for example:
 the rent
 who insures and how much for
 the length of the lease
 whether you or the landlord have the right to end the lease early - a ‘break clause’
 whether you will have the right to assign the lease to another party or underlet
 whether you will have to provide guarantors or a rent bond
 whether VAT is payable on the rent - you may not be able to recover it
 whether there will be a rent review after say 3 or 5 years
5. Repairing obligations
A ‘Full Repairing Lease’ is just that - you have to keep the property in A1 condition even if it was dilapidated when you took it on! If you don’t’ want this then you have to agree a ‘Schedule of Condition’ which may be a set of photos, and expressly agree in the lease that you will not be required to put or keep the property in a better state of repair than shown in the schedule.
6. Service Charges
Beware wide service charge clauses! The landlord will often try and make you pay for long term repairs even if you are only in the building for 2 or 3 years. It is best to agree an annual cap on the amount that can be charged.
7. Physical issues
Will you have a parking space? Will you have shared use of toilets, washrooms, service areas, etc.? Can you put signs up and where? Do you want the right to make alterations to the property? All these things are best resolved before you sign the lease as if you delay till afterwards then you may find you have no rights and have to pay landlord’s fees and expenses for ‘licences to alter’ or ‘variations’ to the lease.
And so it’s all very well knowing what to look out for so you can be a smart tenant, but you will also need to know what risks you may end up taking should you decide to go ahead whatever the terms
Term (Duration/Length): If you agree a Fixed Term, you may have to meet all the Obligations (including payment of Rent and carrying out Repairs) until the Lease ends, even if you move out of the premises or your business fails.
Guarantee: You may be required to personally guarantee the Obligations for the Term of the Lease and, if your business fails, you may have to pay the Rent or repair the building from your personal assets.
Rent: Rent is payable at the agreed figure (usually in advance) regardless of your trading circumstances. Failure to pay Rent (or other charges stated in the lease) at the agreed time will usually result in action by the Landlord to recover the debt; this could result in Court Action, Bailiffs or Bankruptcy and the loss of your Lease.
Rent Review: There will be periodic Rent Reviews unless the Lease is short. If your Lease imposes the “Upward Only” method, your Rent cannot fall regardless of the current Market Rental Value.
Repairs: The ordinary obligation to repair the property can require you to carry out (or pay for) all necessary repairs, even if the disrepair dates from before you sign the Lease. To avoid this, special provisions the proper Schedule of Condition referred to above should be attached before the Lease is signed.
Ending Occupation Early (Alienation): This is only possible if it is allowed by the Lease. It may be by Sub-Letting or by Assignment (selling the Lease) to a Tenant acceptable to the Landlord. Some leases make the original Tenant responsible if a subsequent Tenant fails to meet the Obligations of the Lease. The original Tenant always remains liable for payments when the Lease is sub-let.
