Commercial property can be rented for as little or a long as you require. If you are looking to rent commercial property for very short term (for example, to complete an order), you should opt for a short term lease; if you are searching for commercial property to rent in London for longer than three years, a long term lease is more suited to you.
As well as utility bills, renting commercial property has a variety of costs, which include:
So you’ve found the perfect property, what next? As a tenant, there are a few responsibilities that fall to you, though Landlords and managing agents may share these responsibilities. Make sure you check your lease, as some responsibilities lie with the tenant, and include:
If you want to make any alterations to the interior of the property, or very small changes to the outside, you may not need planning permission, but should check with your Landlord what they allow. Planning permission is generally required if you wish to make changes to the outside of the property, and if you have renovation plans for the building, you may wish to check with your local planning authority before you sign a lease. Before you start work, also check the lease to see whether you will need to return the property to its original condition, before you move out.
Before you start renting a London property, you will have agreed the amount of rent you pay with the landlord. This is normally paid on a monthly or quarterly basis, and if you fail to pay, the landlord may be forced to terminate the tenancy and take action to recoup the debt.
If your lease includes ‘Rent Reviews’, which may alter the amount of rent you pay, these often occur every three or five years. If neither Tenant nor Landlord can agree to a new rent review, an independent professional may be brought in to settle it.
If you want to vacate the premises before your lease runs out, check your lease, as it may allow you to sublet the property – staying as tenant but subleasing to another tenant, so long as you get permission from your Landlord.
When you find the right type of property in the right location for your business, unless you have a large amount cash to spare, you may need to get a commercial mortgage to finance the property’s purchase. Please be aware that to get a commercial mortgage, you will need to commit to a minimum mortgage term (often of about 15 years), and pay a substantial deposit.
As part of your mortgage application, you will need to arrange for a survey to be carried out. This survey will assess the value of premises, the property's condition and investment value, and the state of the commercial property market. You should arrange to have this survey carried out yourself, rather than rely on your bank, as you would be liable for any problems that are overlooked. Your lawyer will then be able to advise you on your mortgage contract, and negotiate the terms of your mortgage arrangement.
Buying a property requires a variety of costs, on top of the property purchase. These include:
Setting up your premises may also require you to set aside a small budget for:
When financing your property, you should also consider the ongoing costs of your new premises, which include:
Please note: when you buy a property, the seller should provide you with an Energy Performance Certificate (EPC) with an energy rating. This EPC can give you a good indication of a building's energy efficiency and the likely energy costs. If the building energy costs are higher than you think you can afford, bear in mind you can make savings by having your air conditioning and boilers inspected.
Once your surveyor and solicitor have negotiated the terms of contract with the seller, any planning permission you require has been approved, all the necessary checks on your building have been made, and all parties involved are happy with the contract... you may be ready to exchange contracts.
Exchanging contracts makes the purchase legally binding. Up until this point, beware that you may be at risk of being ‘gazumped’ by other potential purchasers – if the seller opts to sell the property to another party last-minute, usually at a higher price. To prevent being gazumped after putting in an offer for a property, try to negotiate an agreement to stop the seller negotiating with anyone else.
When you exchange contracts, you will need to pay your deposit on a property. Once this has gone through, you are ready to complete the purchase to become the owner of the property. On the day of completion, your solicitor will hand over the purchase price (paid by the mortgage company or lender) to the seller’s solicitor – which is when your repayments to the lender will begin.
Some last few things to do during completion:
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