Landlord or tenant paying buildings insurance on warehouse?

[jastreet1]

Hi all!

I am new in the world of business so forgive me if this post is a little naive.

I am moving into a new business premises (warehouse/office) but have been told by the landlord that I must pay the buildings insurance at £880 + VAT PA? Now I of the opinion and belief that this is the landlords responsibility not the tenants as I am paying for a policy which insures them and therefore they should pay it?

Could anyone kindly offer any clarity on this please?

Many thanks in advance.

 

[kulture]

This is normal. Indeed it is normal for the landlord to want the tenant to pay for everything including repairs and maintenance. It is essential to go through the lease with a solicitor to fond out what you are letting yourself into.

 

[deniser]

Kulture is right. You will be paying for a lot more than just the buildings insurance.

Commercial property is very different to residential.

In commercial property the tenant usually pays for everything - as if you owned a freehold house - but without the control over what is done when in terms of repairs and insurance - except to the extent you have negotiated in the lease.

For this reason it is essential to use a solicitor and a surveyor otherwise you are likely to have some rather nasty unexpected surprises.

 

[kulture]

The lease is the single most important document you will sign for a commercial property. It defines the obligations of both the landlord and the tenant. It is mostly a one way document, putting all the obligations on the tenant and all the power in the hands of the landlord. It defines what you pay, when you pay, when the landlord can increase what you pay, and if you are lucky, limits on any increases.

It may also define what condition the property has to be in when the lease ends, and you the tenant may be expected to pay for this too. This is why you need both a solicitor (YOUR SOLICITOR) to go through the lease with you explaining it and helping you negotiate, but also a surveyor as you need to know about any hidden problems in the property.

Think of this as buying a house.

 

[jastreet1]

Thank you for the advice. The persons letting the building wanted me to go to the unit, for them to bring the paperwork and sign it there and then!

Seemed a bit panicky over getting it check - which has concerned me. Also, I have asked about the survey (whether they have had a recent survey) and the skipped that question - so I have sent another email on the subject.

In the event that I wish to proceed with this in mind, I will obviously need to take precautions so is there anybody who is able to look at the agreement (for a reasonable fee) as a way of keeping myself protected and be aware of my obligation to honour the contract?

 

[internetspaceships]

Deniser is offering you the best advice you could get.

Also the fee you pay will be reasonable almost regardless of the figure when you see the pitfalls it will prevent.

 

[deniser]

Thank you for the advice. The persons letting the building wanted me to go to the unit, for them to bring the paperwork and sign it there and then!

That is most worrying. Definitely go and find a local solicitor. Do not cut corners. There is a lot more to this than someone looking over the lease.

How long is the lease?
Is it a whole building or part?

 

[jastreet1]

The unit compromises of a warehouse space, office and W/C. The lease is 5 years with the option to terminate from my side only after 3 years.

The unit attached to similar units in a row on a site owned entirely by one business who rent units as a business in its own right - Raynsway Properities.

 

[deniser]

Is the access to it off the public highway or is it off a private road? If the latter, it will also need to be registered at the land registry.

 

[jastreet1]

It is on a private road?

 

[deniser]

So you'll need the solicitor to do the registration anyway which includes investigating title. It's to make sure you register your right of way to the premises.

Your service charge will undoubtedly include an element of road maintenance including lighting, fencing and gates if applicable.

Make sure you understand what all the costs are.

 

[jastreet1]

I have emailed and asked the question. Also I have initiated the transfer for the deposit but have asked to see the agreement before it clears because I assume paying the deposit shows some level of agreement.

 

[deniser]

I have emailed and asked the question. Also I have initiated the transfer for the deposit but have asked to see the agreement before it clears because I assume paying the deposit shows some level of agreement.

Do you mean a rent deposit? There is a document you need to negotiate about the holding of the deposit to make sure you get it back. You should not be paying any money over to the landlord at this stage!

Please slow down, this is not the way to deal with a commercial rental. My PM inbox is full of messages from people who have rushed into things without proper legal advice and things have gone horribly wrong. I should write a book about the pitfalls one day because no-one believes it until it is too late!

 

[internetspaceships]

Fella seriously listen to Denise here she knows what she's talking about.

Take a deep breath and pause.....

 

[jastreet1]

I now have the agreement and am reading through.....See what I make of it.

 

[kulture]

I now have the agreement and am reading through.....See what I make of it.

Unless you are a solicitor, or have had lots of experience with commercial leases, then you may not actually realise what some of the technical terms and jargon mean.

Go see a commercial solicitor. Do not sign anything, or agree to anything or hand over ANY MONEY until you have seen a good solicitor.

It is a buyers market at present, so you should be able to negotiate a good lease and slow things down to a more ordered pace. I.e. YOU should be setting the timetable and not them.