Lease question

[ibby]

Hi

I am looking at purchasing a newsagent on a lease.
It currently has a lease for 5 years left.

If I purchase the newsagent and after 5 years does the lease expire
and automatically renew?

when the lease renews do i need to pay for a new lease?

Thanks

 

[algobusinesssupport]

The lease will expire after the 5 years, unless you negotiate a new lease with the owners of the property. I would suggest negotiating an extension of the current lease before purchasing the business.

 

[ibby]

The lease will expire after the 5 years, unless you negotiate a new lease with the owners of the property. I would suggest negotiating an extension of the current lease before purchasing the business.

Thanks

I will look into it.

 

[PrestonLad]

Thanks

I will look into it.

... but try to negotiate a rent reduction to reflect the economic situation.

... and make sure you have break clauses. For example, an option for you to break out of your lease obligations after, say, 3 years. You don't want to find the newsagents business doesn't work but that you are liable to keep paying rent for the duration of a 20 year lease that you've just proudly negotiated !

Watch out for 'upward only' rent reviews. Were common... but should not be now. But if the lease will be 'assigned' from him to you, then you'd have to pick up his conditions, which might have been negotiated in better economic times. Could be worth negotiating on that... and if the landlord won't budge, then you should use that as a lever to help you negotiate on price.

... avoid personal guarantees... if you possibly can.

.. think whether you want to trade as a limited company. I would have thought yes... but I'm no expert.