Guide to leasing a commercial property
Whether you’re starting a new business or moving premises, leasing a commercial property can be a daunting experience for a business owner.
To help you out, Paramount Investments have put together this simple guide to leasing a commercial property.
Finding a Property to Lease
Local estate agents and chartered surveyors all hold information regarding commercial properties to be leased.
To find your local estate agent or charted surveyors, either perform an internet search using Google or another search engine, or consult your Yellow Pages.
How Do I Know What the Property Can Be Used For?
When you’ve found a property you’d like to rent for your business, always consult the owner first to establish the use of the building. You will need the landlord’s permission to carry out the trade you wish to establish.
In addition, you may need to apply for planning permission in order to change the use of the building.
When Do I Need Planning Permission?
You will need to obtain planning permission to change the trade of the building, regardless of whether or not the landlord agrees with your plans.
Local Authorities have 3 general classifications for shops:
- General retail use, including hairdressers, funeral directors, greengrocers, and post offices.
- Financial and professional services, including banks, building societies and accountants.
- Premises serving food and drink, including cafés, restaurants and takeaways.
The history of use for the property you wish to lease has a bearing on whether or not you need to obtain planning permission.
Is There Anything Else I Need to Consider?
If this is the first time you’ve leased a commercial property for your business, then there will be many other factors to consider.
As a business tenant, you’ll need to plan for a range of business costs outside of your general daily expenses. They include, but are not limited to, the following:
- Rent – to be paid on a regular basis.
- Business rates – due each April, though like Council Tax you can pay over 10 monthly instalments.
- Insurance – you will need insurance for the property itself, and for your business.
- Service charges – generally this applies to offices and industrial properties, though some shops are liable too. They could include repairs, security or cleaning and, if applicable, will be set out in your lease.
- Legal and Surveyor’s Fees – you will need to pay fees to the company who prepares your lease and will be responsible for legal fees if you break the terms of your lease. These fees are not annual, but linked to particular events.
- Stamp Duty Land Tax – The tenant is responsible for SDLT, and the amount depends on the value and length of lease. These values are not straightforward so please contact us if you need advice.
- Registering your lease – all leases over 7 years long must be registered with the Land Registry, otherwise you’re breaking the law. For further information, please refer to the Land Registry website.
Please note this is intended as a general guide –each property is different so if you wish to seek advice for a specific property before signing a contract, please contact Paramount Investments for further information.