It seems as if barely a day goes by without some dire headline regarding the Credit Crunch and the impact upon business and whilst it cannot be denied that the Crunch is having an effect, it isn’t all doom and gloom!
In particular, the Commercial Lease market in Cornwall remains relatively buoyant. Whilst the market is not booming, it isn’t the bleak picture being painted. One reason for this is quite simple, whatever the economic climate if your lease expires it will need to be renewed. However, the Crunch is also pushing an increasing number of businesses to consider a lease as an alternative to freehold ownership; with lending hard to come by and the long-term picture uncertain a commercial lease does make a lot of sense.
Without a doubt, the greatest advantage of a lease is flexibility; a commercial lease, if properly drafted can reflect nearly any situation or arrangement. Indeed, it is a pure agreement between the parties who, save for some statutory minimums, can agree whatever they want in respect of a property. However, that flexibility can also be the greatest peril for tenants who may not see some of the hidden pitfalls. For example an obligation in a lease to keep a property in good repair will, unless qualified, place an obligation to place the property in a good state of repair if it is not at the outset of the lease.
As a tenant you may think it appropriate to simply sign the first document put in front of you by your landlord without considering its terms. Even if you do give careful consideration to the terms of the lease provided, would you be aware of the clauses that may be missing? For example, most leases contain a clause stating that if the property is destroyed so it is not useable by the tenant (and insurance monies have not been withheld because of a tenant’s actions), rent should cease until it is repaired. Whilst this appears a fair and common sense clause, a concerning number of leases do not make such a provision which would leave a tenant paying rent for a property it could not use.
Whilst I can understand a desire to save money in the short term (especially in these hard times) by not consulting a solicitor, the long term costs mean that it really is a false economy. At best it will leave the tenant is stuck with a poor lease which it is unlikely to be able to sell on for the duration of the term (and sometimes beyond if proper procedures are not followed). At worst, it can mean that the lease is not valid, lead to a hefty fine is received from Revenue and Customs and/or lead to years of legal dispute and thousands of pounds in associated costs.
Finally, all solicitors are not the same! It is important to ensure your solicitor has the necessary expertise. Many solicitors treat commercial property/leases as an extension of their residential property or business departments rather than a distinct area with its own specialist requirements. At Follett Stock our specialist commercial property team deals solely with commercial property and has experience of working with a variety of properties all over the country for a wide variety of clients, from high street shops to nationwide, nationally recognised, companies.
For further details please contact Ashley Jones on 01872 245998 or email him at ashley.jones@follettstock.co.uk or any other member of the Follett Stock Commercial Property team on 01872 241700.
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