Commercial Lease documents

[qwertybob]

Hi,
My dad is looking into Commercially Leasing his old shop and this is the first time either of us has done this sort of thing. I've come across the 2007 code and also know it should be "short term" (< 7 years). My question then becomes - where do we get the basic paperwork from? There are numerous sites that offer downloads (starting at about £30) however they all look a bit shifty and generally come with a disclaimer anyway.

Is there somewhere they can be downloaded from for free? It goes against my grain to have to pay for templates to documents that everyone uses - there must be a free legit source (I come from the software world where this sort of thing is typically free).


Note: I've advised him that consultation with a solicitor after they've been drawn up may be a good idea anyway. This will just save time and therefore money given solicitors aren't known for being reasonably priced.

Thanks!

 

Do yourself a big favour and use a solicitor. Leases are more complex than people think and it is simply not something you can pick off the shelf and get the best out of it. Omissions and errors can be more than costly in the long run

 

[arcon5]

Spending that £1k on a solicitor may potentially save him tens of ££k in 5 years.

Well worth the investment.

IMO not using a solicitor is like buying a house without instructing a surveyor, you just wouldn't do it.

 

[Rhodes100]

Forget about any sort of downloaded document. Use a solicitor and stop trying to penny pinch.

With a new lease it is generally accepted that the new tenant pays for the reasonable costs in drawing up of the lease anyway.

Your dad will also need to commission an EPC before he markets the property.

He is leasing his old shop, rather than leasing an empty premises isn't he therefore selling a business, and would need to sell the goodwill of that business?

 

[deniser]

With a new lease it is generally accepted that the new tenant pays for the reasonable costs in drawing up of the lease anyway.

That hasn't been the case for many years although the unsuspecting tenant may well fall into that trap given that the landlord's agent will always try it on!

 

[Stuart Bailey]

Always use a solicitor. There are lots of unwary traps with commercial property leases so its best done by a solicitor.

You dont repair cars yourself or remove your own apendix so why enter into a legally binding document of your investment property without taking the right advice?

Plus if you cock up, your stuffed, if the solicitor cocks up, you can claim compensation.

You dont mention about instructing a surveyor to find the tenant, you should also do this. They will ensure you will get the best terms of the lease ie the market rent and they will also filter out time wasters.

Sometimes the tenant pays the fees not always, it depends upon the bargaining power of the parties.

Good luck, Stu Bailey of Thomas Guise solicitors.

 

[qwertybob]

Thanks for the replies.
To clarify:
The property is essentially an empty property rather than an ongoing business, so no goodwill etc.

We already have a specific tenant in mind (indeed, they approached my dad), so no need to search.


I appreciate that going to a solicitor is useful in a "you're covered" way, but I don't think trying to save hundreds to thousands of pounds is unwarranted when the property is only a small affair (I don't know what the asking rent is, but I doubt it would be more than a couple hundred a month), so just paying off the solicitor would take a long time.

Also, shouldn't the general premise for all lease documents be the same? (the premise behind my question). That's what the 2007 code implies. It certainly is for the 10+ private tenancy agreements I've had over the years, none of which included a solicitor on my end (as the tenant), and several included standard-fare-download/photocopied tenancy agreements where the landlord hadn't either.

You dont repair cars yourself or remove your own apendix so why enter into a legally binding document of your investment property without taking the right advice?

Actually many people do do their cars themselves, just as many people fix their computers themselves, do DIY themselves, Do their accounts themselves etc, despite them not being their primary fields (I'll happily do them myself as necessary). I've done some legal stuff myself in the past to positive effect. Appendix obviously not as that requires exceptionally specialist training and equipment such that even a surgeon wouldn't do it to themselves except in a dire emergency.

 

[arcon5]

You can't compare a private tenancy agreement and a commercial agreement.

Also the 2007 code is voluntary.

Of course you can do it yourself, but whether it offers the relevant protection or not we don't know.

 

[Steve Sellers]

I appreciate that going to a solicitor is useful in a "you're covered" way, but I don't think trying to save hundreds to thousands of pounds is unwarranted when the property is only a small affair (I don't know what the asking rent is, but I doubt it would be more than a couple hundred a month), so just paying off the solicitor would take a long time.

I appreciate what you are trying to do OP, but what you are attempting to do is simply crazy. If you think protecting your business, and future profits is just useful then you are mistaken - it's an absolute MUST.

Please don't take my criticism as personal, it just makes me pull my hair out when I read thread after thread of people wanting to save, what £500-£1000, for them to crash and burn later.

Seriously, it may not end in tears in a week, a month or a year - but sooner or later it will end in tears. I'm a commercial lawyer, and I studied commercial property law several years ago - but I wouldn't dream of dabbling in doing my own lease.

 

[qwertybob]

Please don't take my criticism as personal, it just makes me pull my hair out when I read thread after thread of people wanting to save, what £500-£1000, for them to crash and burn later

Its a valid point, but my counter-point would be: to a lot of people £500-£1000 is a /lot/ of money. Especially to someone who is effectively retired and has no income.

Also, my dad has quite a bit of experience with solicitors and it all seems to be bad. Apparently they have a "cop out" where they just claim they gave advice and the final decision was "yours" so they're not liable for whatever bad happens (seems to obviate much of the point in them IMHO if true).


Again, I have actually advised him to get a solicitor, but surely there must be some template version of these documents? I doubt solicitors start from scratch with each new client but just customise one they've already created. Aren't there free versions out there we can use as a starting point before going to the solicitor (if decides to go that route).

Honestly I just find this rather a culture shock compared to my own field where so much is free. Want the parts to create a new free website in a couple hours? Here are a thousand different places you can start. Want to create a map of south London? Here are the free tools and here's the free data. Want to do your own taxes with double entry bookkeeping? Here's the free software and tax data to do it... They're all knowledge domains that take a long time to get experience in, just like law.

You can't compare a private tenancy agreement and a commercial agreement.

At the risk of sounding like I'm trolling, why not? Genuine question. The sums are smaller for this commercial than all but the cheapest tenancy agreement and the contract won't be for much longer. From my brief perusal it looks mostly similar in concept.

 

[kulture]

All too often we hear of horror stories where a person has signed a commercial lease without a solicitor and looses tens of thousands of pounds as a result. Now these have been tenants. That said the potential is there for a landlord to likewise loose or gain thousands of pounds.

Unlike residential leases, where there is lots and lots of regulations protecting both parties, in the commercial field there is nothing. A poorly worded lease could end up with the landlord being unable to get rid of a poor tennant, unable to increase rent, unable to ensure that the property is properly maintained, etc etc.

Now most landlords like to create a lease where the property will cost them nothing, where the tenant pays everything (including maintenance and buildings insurance) and where the landlord has a good income. The few hundred pounds investment can result in thousands and thousands of pounds return. Further there is no point in drawing up a lease until a prospective tenant is found. Then you can ask for the tenant to pay the legal costs (they will probably say no), or you can ask for a rent deposit, and 3 months rent up front, and then use this up front rent to pay the solicitor.

 

[Steve Sellers]

Its a valid point, but my counter-point would be: to a lot of people £500-£1000 is a /lot/ of money. Especially to someone who is effectively retired and has no income.

Also, my dad has quite a bit of experience with solicitors and it all seems to be bad. Apparently they have a "cop out" where they just claim they gave advice and the final decision was "yours" so they're not liable for whatever bad happens (seems to obviate much of the point in them IMHO if true).

£500-£1000 is a lot of money to me. But what's it going to costs when it goes wrong? In the greater schemes of things its an INVESTMENT, and shouldn't be seen simply as a cost.

Solicitors will start from a main template document yes. But a good one will alter it to your needs, and understand the terms - and advise you of any potential pitfalls of the terms etc.

If you are hell bent on doing it yourself then purchase a template and get doing some serious reading on property law. That is what it is going to take for you to do it properly. How much is your time worth per hour? Then think about the number of hours it will take you and paying a solicitor becomes a no brainer. To put it in perspective I studied property law for 2 years when I did my law degree and commercial property law for 6 months when I did my legal practice course. I have never done leases outside of a classroom and I therefore wouldn't dream of playing around with one.

If you are going to go ahead then PLEASE read through all the threads in this section of people crying when it has gone wrong. I genuinely don't want to see you make the same mistakes that others have - learn from their mistakes.