What repairs will you be responsible for? Repairs you will be responsible for fall under one of two categories - Fully Repairing and Insuring (FRI) and Internal Repairing and Insuring (IRI). An FRI lease means you are responsible for maintaining and repairing the internals and externals of the warehouse, whereas an IRI lease means only inter- nal repairs and maintenance will be your responsi- bility. T e nature of the lease could also aff ect your insurance premiums.
How quickly can I move into the premises? You need a set day upon which you can move into the warehouse and start running your business. If the land- lord mentions a date, pin them down to confi rming this date is after any repair work, cleaning etc. has been completed and when any necessary utilities are ready.
Is there a rent-free period? There will be circumstances when landlords feel an initial rent-free period represents a sensible investment on their part, off ering it as part of the marketing for a property/estate to encourage prospective tenants concerned about start-up costs, or for a warehouse with major ‘fi t-out’ costs. T e landlord hopes a short rent-free period at
the start will make a tenant feel more confi dent in signing, safe in the knowledge you can invest in getting your business rolling.
Does the lease include a break clause? A break clause enables the tenant or landlord to terminate the lease early, upon reaching a specifi c point, such as 30 months into a fi ve- year lease. If a break clause is to be included, you must understand fully the conditions upon which it can be served, including the time frame, method of serving, required signatories, the place it must be served to and the condition of the property. Getting any of these wrong could invalidate the break clause at a cost of tens of thousands of pounds.
Does the tenancy fall under the 1954 act? Most tenancies fall under the Landlord and Tenant Act 1954 Part II, which off ers security of tenure and an automatic right to renew at the end of the lease. T ere are only a few circumstances under which a landlord can fail to renew a tenancy which is ‘Inside the Act’. A landlord can opt to take the tenancy ‘Outside the Act’, meaning
the tenant must vacate when the lease expires, unless a new lease has been agreed. T is should be mentioned in the lease, stating that the lease is outside the provisions of section 24-28 of the Landlord and Tenant Act 1954 Part II.
Even for experienced tenants, agreeing a lease can be difficult and simple errors at the start can be compounded in the future, resulting in unnecessary additional costs that could have been avoided with the right advice from specialist commercial real estate lawyers.
Tanveer Ranshi is a Solicitor in the Commercial Real Estate team at Taylor Walton Solicitors and can be contacted on 01582 731161 or at
tanveer.ranshi@taylorwalton.co.uk
ALL THINGS BUSINESS
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