Commercial Property - Early Instruction Vital
Doug Armstrong, a member of the Commercial Property team at Hughes Paddison, talks about the benefits of instructing a solicitor before rushing in to a property deal.
Too often clients find their solicitors negotiating from a position of weakness when Heads of Terms have been agreed prior to them being instructed on a lease. There are other costs that can be identified, limited and negotiated down from the outset apart from annual rent. It may be possible to agree a rent free period or a cap on service charges. Limiting repairing obligations by excluding certain parts of the building or using a schedule of condition could limit your future costs exposure. If uncertain future costs are the main worry then it may be possible to agree a higher rent in return for very limited obligations in respect of repairs or service charge.
A break clause can be a useful tool and adds flexibility, but a tenant must be careful that the obligations that need to be fulfilled to break the lease are not too onerous. If they are, perhaps try and use this to negotiate a lower rent.
There is no doubt that the economic downturn has hit nearly all businesses hard over the last year. That being said, there are some fantastic opportunities in the commercial property market and some excellent deals to be had. People have been sitting on their hands for a while but for many the time has come to look at their options; are their premises still suitable for their business? Is it too big, too small or in the wrong location? Are they paying too much for their current premises? For many, it will be the ideal time to move, but what is holding them back? In speaking to local agents it is clear that the main concern is the expense of moving and more specifically the unknown costs of taking on a new commercial property. This is why it is important to involve your solicitor from the outset so they can identify, and in a lot of cases limit, their client’s exposure to potential costs.
Instructing a solicitor may sound expensive but it could save you money in the long run and ensure that the lease fits your business requirements.
If you have any questions about this or would like to instruct a solicitor to help negotiate your commercial property deals from the outset, please do not hesitate to contact Doug Armstrong by email firstname.lastname@example.org or phone 01242 574244.