12 April, 2006
"I am only renting not buying" is a comment often made by prospective tenants. How wrong can they be.
When presented with a 50 page lease prospective tenants soon realise that it can sometimes be simpler to buy a property than to lease it.
Prospective tenants intending to take a lease or tenancy of commercial property need two professionals to help them. Firstly, a solicitor who has experience of commercial property transactions.
Where both solicitors are experienced in dealing with commercial leases, the landlord's solicitor will know what revisions to expect from the tenant's solicitors. Where the tenant's solicitor is not experienced, the landlord's solicitor is likely to get his own way on the important drafting issues. The legal work involved in dealing with a commercial lease can often be out of proportion to the apparent value of the lease to a tenant but the eventual cost of cutting corners just to save on legal fees can be enormous.
The second professional any prospective tenant needs to involve is a surveyor. It is common for landlords and their professional advisors to insert in leases "full repairing" obligations on the tenant. If a lease contains an obligation to "keep the property in good repair and condition" that implies an obligation to put the property in good repair and condition and it is no defence to say "it was like that when I got it". This is why having a survey of a property before taking a lease is so important.
Tenants should at the very least be seeking to obtain a qualification to the repairing obligation to the effect that they will not be required to repair and maintain a property in a better state of repair and condition than it is at the commencement of the lease as evidenced by a schedule of condition prepared by the tenant's surveyors and agreed by the landlord and tenant. This is the least a tenant should try to negotiate.
The repairing obligation can often cost more than the rent.
It's not just the repairing obligation that tenants need to worry about. Commercial leases are complex legal documents and it is always wise to look at the detail. It is wise to remember that the landlord who originally lets the property to you and who you may possibly even know may not be the landlord forever and may be replaced by a less friendly person who wants the lease complied with to the letter.
For further information on Commercial Property please contact Forbes Solicitors on Tel: 01254 222399