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Commercial property is often seen as a good investment opportunity, however, if you run a business, you may well be considering purchasing the right premises for your office or retail outlet. Getting the right – or wrong – commercial property can heavily impact the success of your business or investment plans.
You will need to check the planning use for any proposed property as all commercial property is classed according to its use, for example, hotel, shop, industrial site, office, etc. It may be possible to adapt the premises to your proposed purpose, however you will you usually be required to get planning permission and will need to factor in the relevant time and costs for this process.
When it comes to purchasing any of these premises the conveyancing process may vary a little. Large commercial properties will obviously be more complex and take longer to ensure all the finer details of the purchase have been dealt with. It will be necessary to investigate the property title and carry out pre-contract searches. It is likely questions will arise that need to be dealt with by the seller of the property.
Whether you are a landlord or tenant it is good to know you have a safe rental agreement in place for commercial security. A lease agreement is a legally binding contract that allows the tenant to use the premises for business purposes for a set period. It sets out the terms and the rights and responsibilities of each party, and contains a description of the property, its address and the intended use. The lease includes the length, the consideration including the deposit and rent, payment of service charges and rights of forfeiture/termination for each party under the lease. It may also include any subletting or assigning rights and who is responsible for insuring the property and contents.
Before signing a lease agreement, you need to consider each element of the lease, including the responsibilities of the tenant and the landlord, hidden costs, the length of the lease and whether or not a break-clause will be required. A deposit will be required, and rent is usually paid quarterly, but the lease agreement can be more flexible than a domestic one.
Most commercial property leases in England and Wales are subject to security of tenure under the Landlord and Tenant Act 1954. This means both the tenant and landlord have the right to renew the lease any number of times, when it comes to any end. A landlord can refuse to renew a commercial lease, where certain conditions are met, but the onus to prove the conditions would be on the landlord.