Short Term Lease Available

[Heron]

Hi

I am a start up shop that's why I am a bit confused. I have come across some units to lease on a short term basis as the area is due for redevelopment in 2014 which is fine because it gives me a great opportunity to see if I can manage it without tying in for years of commitment. However I am unsure what I should expect to pay. It is just outside a large shopping centre so obviously rates are high (£20k) but I am sure these can be negotiated with the Council. The service charge is pretty high too nearly £10k. The agent has said that the landlord will "take a view" as regards rent. Well, I think it should be rent free as in effect I am saving them nearly £30k. I wouldn't normally open a shop here but if I can get rent for zero I could build a reputation for when I move. Should I say I don't want to pay rent at the risk of losing the unit? I feel a bit naive and am not the greatest negotiator (an area I am going to have to improve on!)

 

[Christiane]

Hi.

Can't help much but I doubt you will be able to negotiate on the rates for starters!

Again if the rates and charges are that high, I doubt the landlord will let you have it rent free, even if it's to be redeveloped, but you can only ask. Some landlords are very easy to negotiate with, some others aren't. Try and ask for rent free and if the answer is no, ask for half of the normal rent.

However I think the bigger question here is why move into a unit that you will have to leave next year? You will only have to start again somewhere else from scratch?

 

[Heron]

Hi Christiane

I have spoken to the Council and they have "suggested" that rates relief "may" be available for a start up business. I can't really apply until I have a unit in mind so won't know at this stage.

Apparently the landlord will take a view with regard to rent and have invited me to make my best proposal that will work for my business. They haven't actually specified any rent. They have several vacant units in that area so I am sure that they would rather have them full and not be responsible for rates and service charges than be intent on collecting rent. As a norm one would expect to get at least 3 months rent free anyway.

I appreciate what you say about moving and starting again and that is certainly something that I will consider before taking the unit on but this again is quite a good negotiating point I suppose.

 

[groovyjon]

Absolutely offer zero rent for a fixed period of time. Tell the landlord this is a trial for you and you are basically willing to cover his costs, i.e. rates and service charge. You may have to swallow the charge for buildings insurance too.

Rates you won't be able to negotiate in the short term. You can lodge an appeal but be prepared for a long wait, and in the meantime you have to pay the full rate. But the small business relief should apply in your situation. And make sure you're looking at the "rates payable" figure rather than the "rateable value".

As it happens, just last week I put in an offer on two shop units offering to cover their costs and pay zero rent for 3 months as a trial.

 

[Heron]

Thanks for the great advice Groovyjon.

I did ask what was included in the service charge and they say that the insurance is as well as a contribution to a reserve fund (?)! which I won't benefit from anyway.

Good luck with your venture!