INFORMATION SHEET FOR PROSPECTIVE TENANTS

INFORMATION SHEET FOR PROSPECTIVE TENANTS

The following is given for your information and guidance

1. Commercial leases are normally for a minimum period of three years although in many instances Landlords may require four or even five years. Longer leases may be negotiated but tend to be in multiples of 3, 4, and 5 years.

2. Commercial leases are frequently subject to rent review pattern, normally at the anniversary of each 3, 4 or 5-year period. It is usual for rent reviews to be in an upward direction only.

3. The rent quoted is generally exclusive of rates and other outgoings such as service charges and may be subject to the addition of VAT.

4. It is usual for Landlords to require a minimum of a quarters rent in advance. Depending upon the prospective tenants experience a quarters rent by way of a deposit may also be required; the deposit to be held in an Escrow account for an agreed period but where the interest accrued will be for the benefit of the tenant. Rent deposits are quite common when a tenant is entering a business venture for the first time and where there may be no references available.

5. Prospective tenants must provide a Bankers and a minimum of three trade references whilst solicitors and accountant’s references are most useful. In the absence of suitable references copies of trading accounts may be acceptable. Your bank will charge you for status of reference enquiries, which is payable by you and should accompany the status enquiry form that will be sent for onward transmission to you bank. We charge £70.00 including VAT for our referencing service which does not include the cost of a bank reference.

6. In some instances you will be asked to pay the Landlords legal fees. Where you are purchasing an existing lease, legal fees may also include those of the Superior Landlord of Freeholder.

7. On confirming matters to both parties’ solicitors, you will need to convey your own instructions to your solicitor. Your solicitor may be asked to give an undertaking insofar as the Landlords costs are concerned and where on this basis your solicitor may ask you to provide him/her with the required funds.

8. The time taken to complete the transaction will largely depend upon:

(a). the speed with which reference enquiries are dealt with;
(b). the time taken by solicitors in dealing with preliminary enquiries and searches.

To avoid delays in dealing with Local Authority searches enquiries can be made of your solicitor as to whether these can be carried out personally. An extra charge will no doubt be incurred for this particular service.

These notes are given for guidance and assistance, but if there are any points arising which you would like to have further information about, then please do not hesitate to speak to one of our members of staff.