If you own a business and lease your premises, an ever-present source of worry is often ‘what happens when my lease comes to an end?’. This blog may be of help to you! One of LawBite’s top Property Experts – Ashley Gurr shares his five key tips to put you in the strongest position when that time comes.
1. Do Your Homework – Know What Is In Your Lease!
It is always amazing how few business people actually read their lease and understand its terms, even when it comes to such fundamental aspects such as its expiry date! It is vital that you know what the terms of your lease are. If the terminology is complex or confusing and you do not understand it, seek advice from a Commercial Property Solicitor. Knowledge is power!
2. Understand How The Landlord & Tenant Act 1954 Works
Firstly, you need to know if your lease is inside or contracted-out of the 1954 Act. Very briefly, if you are inside the Act you have legal rights of renewal (known as ‘security of tenure’), save for certain exceptions (i.e. if you have been a bad Tenant, or your Landlord wishes to redevelop the premises or occupy them for their own purposes etc.). If you are contracted-out of the 1954 Act you are in a weaker negotiating position as you have no security of tenure and the Landlord can simply demand vacant possession at the end of your lease if you fail to agree on renewal terms.
3. Plan Early
By reading and understanding your lease, you will be best positioned to plan early and diarise key dates, including any deadlines for serving Break Notices and the lease expiry date, etc. It really is best to make a note of these dates so that you can plan in advance and make appropriate arrangements, including taking advice and studying the market.
4. Study the Local Market
It pays to know exactly what is available in your local commercial property market and on what terms. There really is no substitute for this. Study the usual property websites and do not forget to speak with your local Chartered Surveyors and Commercial Property Agents. Lots of the best properties never find their way onto the open market – they are snapped up quickly by those in the know! This will place you in a stronger position when it comes to negotiating your renewal, as you will have a better idea what the true market rent for your premises is and what else is available. Also, it will stand you in good stead if your lease renewal negotiations do not go to plan and you need to secure alternative premises.
5. Engage with your Landlord and Negotiate!
There are two aspects to this point. The first is that it is always a good idea to be friendly with your Landlord (or their appointed agents, as the case may be) and to strike up a good rapport. After all, it is usually in both your interests for the lease to work for both parties. By engaging early, and in the right spirit, you are giving yourself the best chance of securing a deal that works for you and your business. The second point here is that you should not be scared to negotiate. If you have done your homework in advance, as set out in this blog, then you will know what does and does not represent a fair deal. Remember that if you have been a good Tenant, looked after the place and paid your rent on time, then your Landlord will not want to lose you; it makes far more commercial sense for them to have a good Tenant paying a reasonable rent than being left with an empty property because you had to go elsewhere to get a fair deal.
To speak to the author of this article, Ashley Gurr, or for expert advice on any business legal matter please enter an enquiry or call us today on 020 7148 1066 to speak to a member of our friendly Client Care Team.