Looking to buy a lease for a shop

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3 MORE YEARS

3 MORE YEARS

Free Member
Dec 31, 2008
954
107
London
  • #1
    Hello Everyone,

    I am looking to buy a shop lease from someone. Although I have been in business for some time I have never taken out a lease. I am not a retail shop in the traditional sense. However, having a shop front for customers to walk in to helps my business.

    This is a very small, I mean tiny shop and its a low-value lease. There are 7 years left on it. I am looking to buy it from the current owner.

    What I want to know is:
    1) Do I need a solicitor in order to buy or take over the lease?
    2) If I do need a solicitor is it normally expensive? What's the average legal expense?
    3) Are there any other legal expenses I need to be aware of?

    What are the things I need to be aware of when buying a shop lease?

    By the way, I am in a completely different business to the current owner.

    Thank you.
     
    M

    Mr D

    Free Member
    Feb 12, 2017
    28,915
    3,627
    Stirling
  • #2
    You need to be certain what is in the lease. A commercial solicitor who knows leases should be able to advise on pitfalls and problems. There are businesses who have found themselves liable for major repairs to the property - after they signed the lease!

    Is the landlord agreeable to passing the lease on?
     
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    3 MORE YEARS

    3 MORE YEARS

    Free Member
    Dec 31, 2008
    954
    107
    London
  • #3
    Thank you.

    Based on conversations so far he is selling the lease on to me for a small premium. He is willing to accept the premium in monthly instalments. Otherwise, there is no way I would be able to take it on.

    Its Central London and some landlords ask for shocking premiums and shocking rent amounts.

    There are some aspects of this deal which I can't say online which make it attractive or suitable for me. However, I also believe he would have a hard time selling this lease because the premises wouldn't not be suitable for the majority of business types.

    How much do you think legal costs would be if I wanted to move forward with this? Just a rough estimate will do.
     
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    3 MORE YEARS

    3 MORE YEARS

    Free Member
    Dec 31, 2008
    954
    107
    London
  • #6
    Firstly, thank you for your replies and advice. I know you are trying to help. The dilemma I have is that this is a tiny place, the lease is only worth under 6K a year. So to spend say 1-2K on legal fess seems like a huge amount in proportion to the value. I think someone said it could cost around that much in legal fees.

    I agree professional legal advice is very valuable, and if I move forward I will try and get some. However, it is such a big chunk of money compared to the size of the deal.

    Thank you.
     
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    kulture

    kulture

    Free Member
    • Aug 11, 2007
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    www.kultureshock.co.uk
  • #8
    You are not looking at the correct value. There could be potential problems of far higher value

    First, there could be an outstanding rent review. It could be backdated for years, it could double the rent. Or more. A solicitor would find this.

    There could be outstanding work that the lease requires to be done.

    The lease could require the property to be returned to perfect condition at the end of the lease.

    There could be significant insurance charges.

    And so on
     
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    O

    obscure

    Free Member
    Jan 18, 2008
    3,370
    879
    The world
  • #11
    pentel said:
    The lease is for 7 years so £42,000, not allowing for any rent reviews, or obligations... £1-£2k still looking expensive????
    Click to expand...
    Plus the potentially expensive repairs and other onerous obligations that landlords often put into a lease agreement and unwitting tenants agree to. These could easily run to way more than 1-2k that the OP is trying to "save".
     
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