First time retail rental

[jaycos83]

Hi Guys,

I've never rented commercial property before. I have always traded over the internet.

I have now decided to give brick and mortar a go instead of talking myself out of it all the time.

The rental prices listed with agents. Can these figures be negotiated?

Leases. Is there such thing as shorter term leases? I was on the phone to a private landlord earlier and he insisted on 2 years. Is there anything i can ask for which means i can maybe sign for 2 but can decide to leave the premises after say 1 year?

I am honestly clueless in all of this so any advice would be greatly appreciated.

 

[emmylou74]

Always negotiate everything when it comes to price and business .

I had a price in my head before taking on my shop that I could afford if everything when wrong. I was lucky that I found a shop below that price so did not have to negotiate on price. But I asked for a short term lease - one year with a month notice get out again if anything went wrong I knew I was not going to be left in heavy debt.

I knew what I could afford and what terms would be safe for me and would have been prepared to walk away if they did not want to accept that.

 

[jaycos83]

So a 1 year lease is the norm then?

I am new to all of this so i am not 100% certain on how everything works. This is the main reason why i always talk myself out of it.

 

[emmylou74]

So a 1 year lease is the norm then?

I am new to all of this so i am not 100% certain on how everything works. This is the main reason why i always talk myself out of it.

sorry I couldn't tell you if thats the norm. This is my first B&M shop. I just did the sums on what I could afford and worse case scenario and put that forward.

 

[oldoakey]

Leases are generally for 3, 5 or 10 years. Usually the longer you agree to sign up for the more bargaining power you hold.

If I were you as I would sign for the shortest period with a break clause as mentioned.

You can always negotiate but it may not get you anyting but if you don't ask.

 

[Unshoesual]

I have a 3 year lease with no get out clause. Originally, when we were setting the terms, my landlord thought I wanted a 1 year get out clause. If we'd gone ahead with that, he wanted the same rent over the 3 years and no free month.

As we went straight for 3 years, we got one year at a reduced rate with a month free and it went up in year two as agreed in our lease.

If the property you're looking at has been empty a while, then you probably have better negotiating power. My landlord is excellent and has already said that he won't put the rent up at the end of the 3 years as he'd sooner have someone in the property paying him rent than struggle to pay him an extra X amount per month and him then end up with an empty property.

Good luck!

 

[BelindaChong]

Type "commercial leases explained" into Google
The Coleman's Solicitors site has some good information.
I viewed a shop last week and found the agent to be pretty forthright and honest about what I should be negotiating over. Everything he said backed up all the tips I had garnered in my research.
Definitely negotiate.

 

[The_Bag_Supplier_Ltd]

Not sure if anyone has mentioned it already but BEWARE the 'Full Repair' Lease. A number of years ago my father had a shop on such a lease for 30 years and upon assignation of the lease to another in the late 90's he had to faithfully match and repair hundreds of inch square mosaic tiles that had long gone out of production in the 1920's before the lease could be assigned! Let alone another whole bunch of expensive and time consuming things.

Don't be too eager to sign, let a Solicitor take a look beforehand.

 

[jaycos83]

So having a solicitor involved is a must?

I'm going to view 2 shops today. Not in the best part of town but i think the theme of shop i am wanting to open will do in that area. The rent is also pretty cheap

 

[Unshoesual]

So having a solicitor involved is a must?

Personally, I would say YES! My landlord wouldn't deal with me unless I had instructed a solicitor too. It covers both of you and yes, mine was expensive but I'm happy with my lease. You hear too many horror stories that surely it's worth paying that extra in case things go wrong?

Hope you have fun looking at properties

 

[Daz]

We've just broke out of our 5 year fully repairing lease and the landlord has hit us with a £40k dilapidations bill.

He only gave us a month to do the works and if we don't in time of the 3 year break we breach the break notice and automatically locked in to another 2 years at £30k per year.

Do not sign a fully repairing lease unless you are advised by a solicitor.

 

[Conglomer Group]

Hello Everyone,

What i observed thread that and by using knowledge come to tell you that Leases usually restrict how the premises can be used. This is often linked to the planning permission but sometimes, particularly in respect of commercial units in shopping centres or parades, the use is very specific so as to ensure that a Landlord has a proper mix of businesses at the development and that there is no unreasonable competition between two Lessees.

Whilst one of the characteristics of a Lease is exclusive possession for a fixed term, a Landlord can bring a Lease to an early end in the event that the Tenant is in breach of any of the covenants in a Lease.

This contrasts with residential tenancies where a Court Order would be needed. However, in the case of any other breach of covenant a Landlord must first give a Tenant notice of the breach and give them time to remedy the breach before bringing an application to the Court to determine the Lease.

However, it must be clearly understood that commercial Leases usually reserve payment of Service Charge and insurance premiums as rent so that if these sums are not paid on the due date the Landlord can forthwith forfeit the Lease for non payment of rent.

Regards

Conglomer Group

 

[japancool]

Hello Everyone,

What i observed thread that and by using knowledge come to tell you that Leases usually restrict how the premises can be used. This is often linked to the planning permission but sometimes, particularly in respect of commercial units in shopping centres or parades, the use is very specific so as to ensure that a Landlord has a proper mix of businesses at the development and that there is no unreasonable competition between two Lessees.

Whilst one of the characteristics of a Lease is exclusive possession for a fixed term, a Landlord can bring a Lease to an early end in the event that the Tenant is in breach of any of the covenants in a Lease.

This contrasts with residential tenancies where a Court Order would be needed. However, in the case of any other breach of covenant a Landlord must first give a Tenant notice of the breach and give them time to remedy the breach before bringing an application to the Court to determine the Lease.

However, it must be clearly understood that commercial Leases usually reserve payment of Service Charge and insurance premiums as rent so that if these sums are not paid on the due date the Landlord can forthwith forfeit the Lease for non payment of rent.

Regards

Conglomer Group

Is Bahamaian law the same as UK law in this respect?
http://lordellor.com/1/post/2012/10/bahamas-commercial-leases-explained.html

 

[Conglomer Group]

Is Bahamaian law the same as UK law in this respect?
http://lordellor.com/1/post/2012/10/bahamas-commercial-leases-explained.html

This information is according to International Standards of legal activities in commercial lease whereas some minor points may legitimate country to country.

 

[japancool]

This information is according to International Standards of legal activities in commercial lease whereas some minor points may legitimate country to country.

It's always good to post where you got your information from.

 

[Talay]

We've just broke out of our 5 year fully repairing lease and the landlord has hit us with a £40k dilapidations bill.

He only gave us a month to do the works and if we don't in time of the 3 year break we breach the break notice and automatically locked in to another 2 years at £30k per year.

Do not sign a fully repairing lease unless you are advised by a solicitor.

Do not sign full repairing leases even if you are so advised.

Get rid of any lawyer who suggests you do sign such.

Take a step back and think about it. You're renting it and the bloke who owns it wants you to fix it up and make repairs at your cost.

 

[promdressers]

Do not sign full repairing leases even if you are so advised.

Get rid of any lawyer who suggests you do sign such.

Take a step back and think about it. You're renting it and the bloke who owns it wants you to fix it up and make repairs at your cost.

While I can see that a FRI lease has it's inherent problems, as far as I have seen most leases are such, particularly in the case of a modern high street units. Is it the case that most LL's will change the terms to avoid the FRI?

I have rented with FRI lease, and the LL was always fair. We did negotiate out of the contract liability for the roof ( this was a shop with a flat over). The outbuildings were in a dreadful state, so I was careful to ensure the contract did not make me liable to pay to bring existing deficiencies to a good standard.

I am in the process currently of looking for an affordable High street retail unit, and so am very interested in this thread, and in others experience and advice.