Knowledge

7 Tips for Landlords

Get an EPC (Energy Performance Certificate)

Every property should have an EPC prior to going on the market.  Some landlords are reluctant to spend money on this but it is a legal pre-requisite and must be provided.  Waiting until a tenant has been identified before instructing an EPC can add to delays.

Be completely clear on service charge and insurance

Rents can appear lower than they actually are to prospective tenants if the price per sq. ft excludes these costs.  This can be unintentionally misleading for tenants and potentially off-putting once they learn the ‘true’ price.

Create straight-forward and comprehensive heads of terms

Heads of terms are an integral part of any transaction and are the basis upon which a solicitor will form their offer.  In many circumstances solicitors are asking for additional information that is not included within ‘standard’ terms and this can delay offers being issued.  The suggestion is to prepare heads of terms in conjunction with a solicitor to avoid delays.

Provide an accurate lease

Delays can occur when tenants want to vacate their premises but don't appreciate the timeframe and procedure required to terminate their lease. In many cases tenants will have the provision in their lease which will allow them to vacate early if the appropriate length of notice is  given however if it is not,  the lease will automatically continue.   Even if the lease is coming to an end, each party must still give appropriate notice because, on tacit relocation, the lease will automatically continue on the same repairing obligation and rental terms.

Pro-forma leases can help with immediate occupation

In some circumstances tenants are looking for immediate occupation, however due to the complexity of leases it can take several days to prepare and draft the appropriate offer. It’s sometimes possible to use a pro-forma lease for short term lettings which can be issued immediately on the agreement of heads of terms. 

Appreciate timescales for change of use

Each property is zoned for a certain use criteria but in the last 12 months there has been a high volume of companies looking to apply for a change of use for their property. Each party should be aware the process can take up to 12 weeks so it may be best to seek a planning consultant’s advice on whether the change of use is likely to be achieved. 

Do your research

Be aware of your incoming tenants and ascertain at an early stage of their intended use and any likely alteration/fit out which is planned within the premises.  Obtain accounting information/business plan or a rent deposit which may provide more comfort as to whether the tenant is able to pay the agreed rent. 

12 Tips for Tenants

Establish your needs

Before committing to a relocation, establish your needs and make sure you have a full understanding of what the business requires ie office space, yardage, car parking and use category etc.

Take advice from property experts               

Your agent will advise on the available accommodation which meets your criteria and  ensure your liabilities are minimised (especially for short term FRI leases) in conjunction with ancillary specialists such as building surveyors and planners. We are aware of examples involving self-represented tenants who have agreed to take on premises in a certain condition and have been responsible for dilapidations liability due to them not recording the condition of the premises on entry. Furthermore, self-representation can be costly if you fail to secure the right property at the right rental with good incentives and on the most cost-efficient term. A good agent will make sure you get the best deal for your business.

Be in a position to commit

Some tenants are looking 12-18 months in advance prior to their relocation. While it’s a good idea to be aware of market availability, the chances of a property being available in 12-18 months is relatively slim.

Be aware of stock pipeline restrictions

Supply is generally tightening but particularly so for specific types of property in certain locations.

Don’t lose out by shopping around for too long

Once you have selected a property you may want to consider others but you could lose out if your landlord accepts an offer from another tenant.

Don't expect a ‘deal at a steal’

Although we are in a perceived buyers’ market, each landlord is under different pressures and will appraise their portfolio in different ways. Some landlords are reluctant to reduce quoting rents as this could have an adverse effect on the entire portfolio of properties within the same area.  It should not be assumed that rents will automatically be reduced to secure tenants.

Know that landlords sometimes delay matters

Some landlords are prepared to look at delaying tactics prior to agreeing heads of terms, and sometimes will delay issuing a legal offer if they think they can find a tenant with a better covenant or who is prepared to agree more suitable terms.

Use a lawyer with commercial property expertise

Residential and commercial property transactions are very different.  A lawyer with experience of commercial property deals will be able to give expert attention to detail and help expedite a smooth sale.

Appreciate timescales for change of use

Each property is zoned for a certain use criteria but in the last 12 months there has been a high volume of companies looking to affect a change of use for their property. Each party should be aware that change of use allocation can take up to 12 weeks therefore it may be advisable to seek a planning consultant’s advice on whether that change of use is likely to be achieved. 

Be aware of what a schedule of condition is

A tenant entering into a full repairing and insuring lease has agreed to keep the premises in a certain condition throughout the duration of the lease and it will be their responsibility for returning the building in no worse a condition on lease expiry.  In many circumstances premises previously occupied have, over a period of time, been adapted or damaged in some way, therefore a tenant should be made aware that they can include and record the condition of the premises prior to entry, thus reducing their liability on lease expiry.  If no schedule is attached it is assumed the premises are in good order throughout. 

Beware of dilapidations liabilities

The absence of a schedule of condition allows the landlord to seek a dilapidations claim and therefore it is imperative that the tenant is satisfied with the condition of the premises prior to agreeing a lease.  If there are question marks raised over the quality of the premises, the tenant may have the right to include a schedule of condition highlighting any defects.

Give appropriate notice when breaking or renewing a lease

Read and understand your lease.  Leases in some circumstances have the provision to be broken however if the appropriate time frame is not given, the lease will automatically continue on the same repairing obligation and rental terms. Even if the lease is coming to an end each party must give the appropriate notice or it will be assumed that both parties wish for the lease to continue.