Looking to lease commercial property for first time, please help

[Jennyattheloft]

Hi all

I am a qualified beauty therapist/nail tech. After spending the past 8 years paying people lots of money to rent a room (as well as being dictated too), I ve decided to go it alone and lease my own property.

I have found somewhere that would be ideal. Lovely property, beautiful grounds, just out of main village but with signage along a main road. The rent isn't bad £6,500 per year and I ve been told the rates (value of £5,100) won't be payable until next March??!

It is an old building and the lease is a fully repairing and insurance lease which means I will be responsible for any work that needsdoing (the windows looks a bit rotten and the roof looks like it won't last long).

I would be grateful of any thoughts/ideas of things I need to look out or/ask before I look at signing a lease etc.

What sort of things will be looked tabby the landlord, will I need to pay a solicitor and how much? The agents say I ll need to apply for change of use planning has anyone done this?

 

[skincarebod]

hi
its really worth taking advice from a commercial solicitor at this stage, quickly. Obviously you will need one anyway if you proceed but i strongly recomend you find one now. Basically they can advise you on how to negotiate the lease, what terms are normal in your area and they could save you a lot of money. You shouldnt have to pay them anything if you ask for an initial consultation to have a chat. At this meeting they should be able to set you along the right path. (and they will hope to get your work!)

good luck !

 

[Jennyattheloft]

Thank you. I will do that.

The Agents have said they can deal with the change of use. Fee would be £1,500 plus VAT plus fee to council. Not sure if this is a reasonable price or not?

 

[stephanie_87]

Agree with above, I just leased my first property and the solicitor was very helpful. They know their stuff. Just another thing with regards to the business rates, I am pretty sure they are payable from when you officially take over the property. Small business rate relief means that all small businesses can pay their business rates at a reduced rate. This is stopping in March ( so they say) I suspect this is what they meant by not payable until March. As in you won't have to pay the whole amount until next financial year. However I may be wrong. The business link website is a god send, just read read and read everything you possibly can about business start up. It's a mine field. Good Luck 😃

 

[stephanie_87]

Oh an I believe changing the use with the council can be expensive. Ring up the planning department of the council and give them the property address and what you are planning to do. They will be able to tell you exactly what has to be done if you decide I go ahead.

 

[Make-Up Artist]

Hi, I have a commercial property lease and it can be a minefield. Definitely hire a lawyer to look over it - they will tell you things you never even thought of, searches will need to be done, land registry and more. It could cost anything from £800 to £2000 depending on who you use and how much is involved. It can be a nightmare so the solicitor could save you making an expensive mistake!!! They can also advise you on some of the terms to ensure your landlord (however nice they many seem) is not trying to rip you off. The will advise you which points could be negotiated.

 

[Make-Up Artist]

Yes I have also done the change of use and that can also be a nightmare. The forms are horrendous, the process slow and could cost around £400 depending on your council. I did it myself last time but wished I hadn't. If I ever have to go through this process again I would ALWAYS hire someone to do it for me. It would only cost a couple of hundred pounds to hire a professional to do this on your behalf, but money well spent as it is just too difficult and painful otherwise. It also takes around 8 weeks. The paperwork alone tool me 14 hours becasue you also have to submit plans (yes, even just for change of use) with the application and I got those on line so it added to the time taken to submit the forms. Councils don't tend to be very helpful when it comes to answering the questions either, the whole process it a pain. I'm not sying don't go for it, I'm just saying don't do it yourself. I would NEVER do it again myself (planning app or change of use that is).

 

[Jennyattheloft]

Fab thank you for all your advice & comments. Im going to doeak to council tomorrow re change of use but will definitely be hiring domeone to do it for me! As for rates i believe you pay 45p per pound of rateable value (just under 50% in other words). I believe gov are giving 100% relief to small businesses until marvh next year meaning i wont need to pay them until then?

 

[stephanie_87]

Ah, I see, yeah if your rateable value is under £6000 you are exempt from paying rates. Yeah that makes sense now good luck with everything x

 

[makeupartistzoe]

Er....don't sign a fully insuring and repairing lease!!! i've got a 10 year lease on a grade 1 listed building....i't quirky, beautiful, good location but I wasn;t going to shoot myself in the foot re repairs....if you sign it and the landlord wants a new roof, you would pay for the whole thing!

I have fair rent and have had rates relief from the council coz they want shops in my end of town full, not empty. But I spend 3k on my solicitor and I got local fire and rescue to tell me about fire safety before I even considered it. Then to rent out other space to other people in your salon, if you want to, which you might as it's good income, you have to have clauses. And there's a little damp in mine and I wasnt going to be held responsible for the roof/structure/etc! He could have asked me for a new roof/ blamed the damp on me and ask me to fix it etc....

...make sure you know when your rent reviews are and change the use before you go any further xxxx

 

[eternalscot]

My advise is make sure you get a good lawyer and be a pest ask for everything (you can in this market to a certain extent). Things I would like to see in a lease are:

Who is responsible for repairs, lets hope its not you or you can end up with a statatory notice, scaffolding up and a bill for £20k (as happend to a friend of mine).

Rent increase usually it is every three years no more than 3% (don't get yourself in a bad situation)

Option to buy the property after 3 years at market value (this is a great one if your running a successful business as it means it is so much easier to sell your business as a going concern)

If the business was not to work out do you have to put the property back to how it was?

Another friend of mine ended up bankrupt the shop had dry rot and he ended up having to foot the bill and went bankrupt.

These two people both had lawyer, but frankly some lawyers are crap Im forever having to check legal documents and correcting them, don't trust re check! When I had my first shop I had a brilliant now struck off solictor he never even charge me and got me a brilliant deal the agent used to say "so I bet your paying him loads"! Although to my embrassment he did have the agent in tears once. Nevertheless my lease being trashed and sorted left in a good position. This is a time to be utterly ruthless.

 

[Macoroni]

Don't do it ! ESP on an old building absolute nightmare as a friend with pub has found out now roof and windows need fixing never ever do it too much cash into someone else's pocket

 

[eternalscot]

Don't do it ! ESP on an old building absolute nightmare as a friend with pub has found out now roof and windows need fixing never ever do it too much cash into someone else's pocket

It would be ok if she makes sure ALL of it is the landlords responsibiltiy and that is perfectly possible.

 

[Jennyattheloft]

Thank you for all your replies. The agent has said I can ask landlord to exclude things from the fully insuring and repairing part of lease (ie roof or anything that comes up from a survey). Got to be worth asking. He also suggested drawing up a schedule of terms with photo evidence of what state things are in now (ie condition of windows etc) that way I can get that all excluded from the repairing and insuring agreement.

The landlord sorts the insurance (buildings) and I pay him. I will then be responsible for contents insurance. Presumably most things will be covered by this insurance unless it's general wear and tear?

I have given my solicitor (and she's good) a list of terms I want to see included. I'm waiting for her to add to it and get back to me. She also said that after three years I can go on land registry so I have option to buy.

I'm still waiting to hear from the council as to what change of use is required.

From what the agent has told me, the landlord has another property on the same plot which he s leased for years to the same people so he has to be doing something to keep them happy??! Also he apparently isn't strapped for cash so I'm going to push for all I can.

Really appreciate all your comments and feedback. Keep them coming! Xx

 

[souz]

yesyou are right about not paying rates until march next year, all small businesses just starting up can. just contact your local council and ask them x

 

[MrsHBeauty]

This is stopping in March ( so they say) I suspect this is what they meant by not payable until March.

Our council have been saying that for a few years now. I get 100% rates relief which is a great help.

x

 

[Jennyattheloft]

At least that's one less thing to have to spend out on each month! Thank you

 

[Jennyattheloft]

Has anyone had problems getting change if use permission if property isnt considered as 'town centre'?