Help - Renting a commercial (takeaway) space for first time

[faddys123]

Hi all

A few years a go my parents purchased a 3 storey building, with first floor being previous takeaway and the 2 floors above being a flat. Unfortunately as time went by my father got sick and passed away in December and now I am helping my mother with this property.

We have someone that is interested in renting out the ground floor premises with a cellar which used to be licenced as a takeaway A3,A4, A5. At the moment it is currently empty we did do some refurbishments to bring it up to date, so basically it just renting the space, so the person renting would need to bring in all their equipment etc

As we are new to this, as landlords, I am not sure how to go about this and how much it is worth to rent, we thought about £900 a month and the person was interested in renting and starting his own takeaway business.

I know we have to go to a solicitor to draw up some sort of lease. My main question is what should be included in a lease and what are the things I should watch out for? I read somethings online such leasehold which is paying the landlord an annual rent for a number of years? Would that be the best way to go forward or go through a standard let and ask for a deposit ? We are really new to this, however I would like to learn more about it and avoid any problems in the future and hopefully be able to expand.

Thank you all in advance.

 

[Mark T Jones]

Rent - you need to be guided by rents of nearby similar premises - anything else is just a guess.

Contract - a legal firm who specialises in commercial premises will be able to guide you here, and is a wothwhile/essential investment.

 

[WaveJumper]

As above you need to engage with a commercial solicitor who will guide you on writing up the lease they will obviously have the knowledge to guide you on what is required.

With regards to rent check out commercial rents on line ie Rightmove etc to give you an idea of what is being charged in your local area depending on your location you might be pleasantly surprised at what is the norm. I would even suggest speaking to a couple of local agents in your area too.

My one other bit of advice for what its worth is make sure you photograph the premises properly so you have a clear record (and your new tenant) of the condition of the premises which are handing over as in years to come this may well form part of your de-laps negoisiations

 

[estwig]

It might be an idea to check in with the LPA, make sure your permissions are still in place.

 

[Jass T]

As some points already mentioned
1) Make sure all your paperwork is still valid. It may have been in your father's name and may need to transferred.
2) Things you will need to check. Hotfoot consent so class 3 use. Your electric and gas safety certificates.
Energy Efficiency Certificate.
3) Check what other take aways are renting for in area. Get a good solicitor, who specialises in commercial property.

 

[kulture]

I would add that in addition to a good commercial solicitor you should consider engaging a good commercial surveyor who can advise you on the likely rent and type of lease you should draw up. You need strong professional advice.

There are many things to consider, for instance what are you going to do with the rest of the building? Would it’s potential be reduced but some types of hot food takeaway ? What kind of due diligence will you undertake on the prospective tenant? It is normal for the landlord to insure the property, but most of the cost of insurance is passed on to the tenant.
Most commercial lets are written so that the landlord has few to no obligations and no costs, whilst the tenant pays for everything. But this comes undone if the tenant falls behind in payment.
Likewise you need to be covered if the tenant runs up huge utility bills and absconds without paying leaving you the landlord with a mess to clear up and huge debts.

Done properly this can be a great investment, but it can also be a huge liability if you don’t take care.

 

[WaveJumper]

So to sum up spend a few hundred quid now and you will save yourself a whole lot of heart ache if things turn sour and as @kulture said above done right this can be a great investment best of luck

 

[estwig]

There are many things to consider, for instance what are you going to do with the rest of the building? Would it’s potential be reduced but some types of hot food takeaway ?

It's a good point, getting residential usage above any kind of commercial kitchen, involves a lot of fire regs to comply with, very difficult to get, especially in an older building.

 

[IanSuth]

It's a good point, getting residential usage above any kind of commercial kitchen, involves a lot of fire regs to comply with, very difficult to get, especially in an older building.

And there was a previous thread on here where a building had been split and the food establishment therefore didnt have access to a toilet