Ed Surman, Director at Mushroom, interviewed Jane Hartley of Jane Hartley Associates, Manchester for his podcast, Business With The Fun Guys. The podcast interview is available here to listen to, however we’ve taken the main points of Hartley’s teachings and outline them below:
If you’re looking to rent premises, you may be concentrating on price and location. However, there are various other considerations to factor:
Considerations of Lease
- What’s the rent?
- How long can I occupy it?
- Is there a rent free period? – which may be available for long term leases.
- When is the rent review?
- Is there a break clause? – so you can pull out if it’s not working.
- Can you sublet or assign the premises?
- Is the lease within the Landlord and Tenant Act 1954? – which gives security of tenures rights.
- What are your repairing obligations? – are you expected to put the property back to a better condition than when it was given to you? Avoid a full Repairing Insuring lease.
- For a typical 5 year lease, it is advised to renegotiate at least 2 years before the end of the lease, as the landlord may not grant a new lease or may demand ridiculous terms. You may need to relocate which is unlikely to be a quick process.
- If the lease is within the Landlord and Tenant Act 1954, the landlord must grant a new lease on similar terms. However if the lease is outside the Act, there is no right and open negotiations can take place. But even if the lease is within the Act, the landlord can still refuse to renew the lease on grounds of redevelopment.
- If landlords are getting a good stream of income from a tenant who has been paying regularly long term, it is not in the landlord’s interest to deny a renewed lease.
How Professionals Can Help
- Get a property agent to negotiate terms for you.
- Get a surveyor to survey the premises and issue a Schedule of Condition so that you’re only expected to return the premises to the landlord in the condition you received them.
Get a solicitor to:
- Negotiate terms of the lease
- Conduct due diligence to check:
- The landlord owns the property?
- If the landlord has a lender, does he have permission to let the premises?
- The premises has the correct permission for use?
- If there are any current disputes?
- If there are separate meters if it is a multi-tenant property?
- That you can do what you need/want to do as a business? Ie. is there mobile phone coverage?
- If the lease needs to be registered with Land Registry?
Are you considering renting premises for your new business, or renewing your lease? Remember in all aspects of business, there are professionals with expertise that can guide and help you.
If you would like to find out more about Jane Hartley Associates, click here.
If you’d like some business support, please contact Mushroom by clicking here.