Checking a Commercial Lease

[sambo]

I am looking to purchase a small cafe with the reassignment of the existing lease.

I have a copy of the current lease in the current owners name and as far as I can see, there are no real issues in it (I am NOT a solicitor at all).

I was looking for a solicitor to read the lease and see if they could see any issues, but I am told this is in the region of £600 + VAT!

Does anyone know of anyone who could check this through, maybe an online agent to save costs?

Thank you

 

[Toby Willows]

I’ll have a look at it for just £250.

 

[sambo]

Hi Toby. Thank you. Are you a commercial solicitor?

 

[Chris Ashdown]

First you need to establish that the landlord will accept a transfer of lease and if doing so a Personal Guarantee will be required

The landlord may prefer to start a new lease which may contain new features

You would be advised to have a survey of the building done prior to the lease and have your own solicitor check the lease and explain your liabilities

The old lease whilst useful will not include any changes the landlord wants to transfer the lease

 

[Toby Willows]

Hi Toby. Thank you. Are you a commercial solicitor?

No, but for less than £600 you ain’t going to get one either. £600 seems very cheap, it’s not at this stage you want to be trying to save a few quid on what will probably £100,000’s worth of liabilities.

 

[sambo]

Thanks for the replies.

The Landlord has agreed to 'reassign the lease' with supposedly no changes, other than names. There is just over 4 years left on the lease.

The Cafe has been there over 20 years with a few changes of owners. Would I really need searches to take the lease on a property? The cafe is in a block of 8 other businesses with flats above and the other businesses have also been there years and say the landlord is 'good and fair'.

I am obviously trying to budget everything and get the best deal I can with everything ;-)

 

[Mr D]

How much could you save by not spending the money and how much is not spending it going to cost you?

 

[Toby Willows]

I am obviously trying to budget everything and get the best deal I can with everything ;-)

One thing is guaranteed regarding the lease, without professional advice the landlord will be the one getting the best deal.

Ideally you want a new lease which is longer and a earlier break than four years. Plus possibly many more amendments. A survey on the unit is also very advisable, searches a must.

 

[bovine]

It worthwhile going through with a professional, or you could end up very out of pocket at the end of the lease.

 

[Chris Ashdown]

There is more than a fair chance that at the end of the lease there will be a large sum required to pay for repairs etc to make good the building be it window frames, electrics, rot and so on that is what professionals are used for
At the end of the day it does not matter a fig how nice the landlord is it comes down to the letters in the lease contract

 

[Supercoach]

I was looking for a solicitor to read the lease and see if they could see any issues, but I am told this is in the region of £600 + VAT!

This may be the most cost effective thing you will ever do in the business.
For example, whether the current lease is outside The Landlord and Tenant Act is crucial to your decision as is having an accepted schedule of dilapidation - otherwise you could find yourself paying for all refurbishment/repair costs caused by the existing tenant.
Approach this as a new lease. Decide want you want in terms of years, break clauses, refurb's, rent-free periods etc etc., as it is simple enough to modify the existing lease.
The liabilities that can arise from commercial leases can be enormous and - as I sense you will be taking on a personal liability - you will have no protection from these costs.
Please don't make your first business decision a poor one - it could be with you for a long time.