Are you looking for the perfect office space to rent? Then you know just how important it is to secure the best terms for your commercial lease.

It’s not enough to just find a property that fits the needs of your business operations – you also need to protect your rights.

When it comes to negotiating the details of a new lease, it’s common for the different parties to have their own priorities.

For tenants like yourselves, this lease could be one of the biggest financial commitments you face.

On the other hand, landlords will be looking to keep as much control over their properties as possible to protect their investment and maintain value.

This is where a well-negotiated lease becomes useful to create terms that appear fair to both parties.

Are you looking for stability or flexibility?

The length of your lease should align with the needs of your company. If you’re an established company looking for long-term security, a longer lease might be ideal, but if you are a start-up or a business that needs more room to adapt, a shorter term may be better suited.

Whatever your situation, it’s crucial to ensure your lease is protected under the Landlord and Tenant Act 1954, so you have the right to automatically renew when the term ends (with some exceptions).

Without this protection, you expose yourself to losing your office space, forcing you to face the unexpected costs and disruption of relocating your business.

It’s also important to factor in when you will pay your rent. Commercial rent payments are typically made quarterly.

However, an increasing number of landlords are accepting monthly payments, which may help your business with cash flow.

Requesting rent-free periods

A rent-free period can be a great incentive when starting a new lease. As the term suggests, it is a set period of weeks or months where tenants do not pay any rent whatsoever.

This can give you that much-needed breathing space to get settled in and manage any set-up costs.

Although it is often included at the start of a lease, it can be offered at any time, possibly as a negotiation tool for completing refurbishment or fit-out work that enhances the property.

Would a break clause give you peace of mind?

A break clause can offer some flexibility by allowing either party, or in some cases both, to end the lease early with notice.

Break clauses can also be structured in different ways. It could be a one-off option at a specific point in the lease or a rolling break right, giving you flexibility at multiple stages.

Who do you want to be responsible for repairs?

Unlike a residential let, commercial tenants are usually responsible for the cost of repairs and if they are leasing the entire building, the full obligation typically lies with the tenant.

If the property’s not in great shape to begin with, you’ll want to make sure your obligations reflect that by limiting your responsibility to maintaining the condition of the building.

Tenants should, therefore, arrange a Schedule of Condition report, which sets out the exact condition of the property using photographs.

This is then attached to the commercial tenancy agreement to document the condition of the property prior to the lease.

Do you intend to sublet or transfer the lease?

Most commercial leases allow tenants to transfer or sublet with the landlord’s consent.

However, the landlord is entitled to set conditions for this to go ahead, for instance, they may want you to pay rent up to a set date and assurance that the new tenant is financially sound.

You’ll also likely be asked to provide a statutory guarantee, ensuring the new tenant meets their responsibilities.

We recommend that you clarify these conditions early on in the negotiation process to avoid later disputes.

Would you want to make changes to your office?

If you have plans to make structural alterations to the property, it’s unlikely that your lease will allow for this.

For internal, non-structural changes, like painting the walls, installing new light fixtures or updating plumbing fixtures, you will need to get your landlord’s permission unless stated otherwise.

Even if it’s not on your immediate agenda, it’s worth discussing upfront to find out what alterations are acceptable, if any, and avoid surprises later on.

We are here to help

Ansons Solicitors’ Commercial Property team can assist you with all aspects of renting a commercial property and negotiation of a lease including:

• Moving from quarterly to monthly payments
• Rent reductions linked to a tenant’s business turnover
• Rent-free periods
• Adding or removing break clauses

To find out how our specialists can help you, please contact us.

We have offices in Cannock, Lichfield, Sutton Coldfield and Dudley.