Renting part of a Commercial Property
Discussion
Hi,
We are looking to rent out an unused part of our new office building (approximately 1,000 square foot). The building is on two levels and the area we're looking to let is the entire ground floor of one side, which has its own seperate entrance and exit.
Previously, the entrie building (both levels) was occupied by one company.
There are two issues we need to sort:
1) Business rates: The whole building currently has a rateable value of 40k. If we split off 1,000 sqft, what do we have to do to have the building rated as two seperate rating units? Is it as simple as just contacting the vaulation office or are there things we should do first before it could be re-rated?
2) The part we will rent out has the original street-accessed front entrace to entire the building. Our busines is essentially not open to the public so we have no need for a street-front entrace. The entrance we use is a side entrace which, although not hidden in anyway, is not the orignal entrance and not the main entrace the previous company used. Consequently, it is the street-front entrace that the post if currently delivered to. The issue we have with this would be getting our post delivered to our part of the building and the new tenant's post being delivered to theirs.
One idea we have is whether we could split the address in a '1' and '1a' type setup. With sufficient signage it would be fairly clear which entrace is for which company.
However, I'm not really sure what the process is for establishing a new address. Is it something that requires planning permission, or is it just a case of registering it with the post office?
I hope that explains everything; I can draw a rough diagram of the layout if that helps
Thanks,
The Doctor
We are looking to rent out an unused part of our new office building (approximately 1,000 square foot). The building is on two levels and the area we're looking to let is the entire ground floor of one side, which has its own seperate entrance and exit.
Previously, the entrie building (both levels) was occupied by one company.
There are two issues we need to sort:
1) Business rates: The whole building currently has a rateable value of 40k. If we split off 1,000 sqft, what do we have to do to have the building rated as two seperate rating units? Is it as simple as just contacting the vaulation office or are there things we should do first before it could be re-rated?
2) The part we will rent out has the original street-accessed front entrace to entire the building. Our busines is essentially not open to the public so we have no need for a street-front entrace. The entrance we use is a side entrace which, although not hidden in anyway, is not the orignal entrance and not the main entrace the previous company used. Consequently, it is the street-front entrace that the post if currently delivered to. The issue we have with this would be getting our post delivered to our part of the building and the new tenant's post being delivered to theirs.
One idea we have is whether we could split the address in a '1' and '1a' type setup. With sufficient signage it would be fairly clear which entrace is for which company.
However, I'm not really sure what the process is for establishing a new address. Is it something that requires planning permission, or is it just a case of registering it with the post office?
I hope that explains everything; I can draw a rough diagram of the layout if that helps
Thanks,
The Doctor
As nobody else is responding, I'll give it a go ...
Yes, just contact the Council to split the Rates. The sum of the parts will be more than the whole of course.
Not done the address thing but I would think letting your local sorting office and the postman know of the two letterboxes should be okay.
Where do you stand with utilities?
You will need to let your building insurer know of the letting.
You might need landlords insurance too.
Yes, just contact the Council to split the Rates. The sum of the parts will be more than the whole of course.
Not done the address thing but I would think letting your local sorting office and the postman know of the two letterboxes should be okay.
Where do you stand with utilities?
You will need to let your building insurer know of the letting.
You might need landlords insurance too.
I wouldn't bother splitting the building for rates purposes - carry on as normal as you still own the entire premises.
Apportion the relevant amount of bussiness AND water rates and add them to the monthly rent, payable in advance. Continue to pay rates as normal - the Council isn't interested so long as the building has the correct Building Use Class (B1, B2 etc) to cover the tenant.
You can continue to insure the building, whilst the tenant insures their contents.
You can go to the expense of a separate utility meter but remember you are liable for fixed costs during void periods. We just come to an agreement with a tenant over reasonable consumption, add it to the monthly bill and monitor the situation.
The postman can continue to deliver to the usual door - just put 2 letterboxes to the side of it: one with your name, one with the tenant's name.
You will need to consider parking spaces and waste removal. Will the tenant have toilet and washroom facilities? Redcare Alarm and Fire Alarm / Extinguishers? Will the tenant need to put in their own phone system? Intercom? Window Cleaning? Maintenance & Repairs?
Your rent level will reflect what is included and what is not.
Apportion the relevant amount of bussiness AND water rates and add them to the monthly rent, payable in advance. Continue to pay rates as normal - the Council isn't interested so long as the building has the correct Building Use Class (B1, B2 etc) to cover the tenant.
You can continue to insure the building, whilst the tenant insures their contents.
You can go to the expense of a separate utility meter but remember you are liable for fixed costs during void periods. We just come to an agreement with a tenant over reasonable consumption, add it to the monthly bill and monitor the situation.
The postman can continue to deliver to the usual door - just put 2 letterboxes to the side of it: one with your name, one with the tenant's name.
You will need to consider parking spaces and waste removal. Will the tenant have toilet and washroom facilities? Redcare Alarm and Fire Alarm / Extinguishers? Will the tenant need to put in their own phone system? Intercom? Window Cleaning? Maintenance & Repairs?
Your rent level will reflect what is included and what is not.
I would get it re rated, unless you want to include rates into the rent.
Utilities is a good point, coming to an agreement or including it would be simple. I would check the wiring and ensure the floor is on its own breaker and both of you can get to the Main Electrical board, stuff like UPS's can trip them out easily
Do you own the building as a whole?
Could look at an easy in easy out option for tenants to get them in and include all costs for a set fee .
Utilities is a good point, coming to an agreement or including it would be simple. I would check the wiring and ensure the floor is on its own breaker and both of you can get to the Main Electrical board, stuff like UPS's can trip them out easily
Do you own the building as a whole?
Could look at an easy in easy out option for tenants to get them in and include all costs for a set fee .
Points to consider:
Do you own the building? - if not and you lease, what does your lease say RE alienation?
Services - are these common or to be split i.e. do you need new meters etc.
Common areas - do you share a car park? toilets? hallway? will you be putting a service charge in place?
Insurance - sort of falls within services..
Business Rates - easy to split but consider the option of letting on an 'all inclusive' basis if you think the above may prove difficult. Therefore no need to worry about splitting services or rates (however keep in mind the use of the business to occupy, if they are a data center (extreme example) they will use a lot of energy!
Fire exits - does the layout proposed block off any areas etc. or increase lengths to exit ? could be worth considering.
What is the location of the building? have you looked at achievable rents and incentives you will have to negotiate?
Do you own the building? - if not and you lease, what does your lease say RE alienation?
Services - are these common or to be split i.e. do you need new meters etc.
Common areas - do you share a car park? toilets? hallway? will you be putting a service charge in place?
Insurance - sort of falls within services..
Business Rates - easy to split but consider the option of letting on an 'all inclusive' basis if you think the above may prove difficult. Therefore no need to worry about splitting services or rates (however keep in mind the use of the business to occupy, if they are a data center (extreme example) they will use a lot of energy!
Fire exits - does the layout proposed block off any areas etc. or increase lengths to exit ? could be worth considering.
What is the location of the building? have you looked at achievable rents and incentives you will have to negotiate?
Thanks for all the replies so far.
To answer a few points: We own the entire building. The area we are looking to rent out has it's own toilets and kitchen and is essentially self contained. We have plently of car parking spaces so we can use them to negotiate with.
We will probably look to offer an inclusive rent with the utilities (the area does however have it's own circuit and data wiring).
The main reason for the rating unit split would be to save on rates when it's unoccupied and so the cold smaller unit attract rate relief (if this worked out to lower the rates cost overall).
Therefore if there overall rates for the whole building (both sides) could be lowered due to unoccupied discount (for the first 3 months if unoccupied) and rate relief (longer term) of the split-off part, we would save regardless of whether we rent on a rates inclusive basis or not (at a rough guess I would think the rateable value for the seperate unit would be in the region of 9 - 10k so would attract some relief).
Would anyone know if the vaulation office give quotes for this sort of thing or is it a case of they will only give you a rateable value if the change is implemented?
Also, with regards to the post situation, our entrance (or rather, where we want the post delivered) is nowhere near the original street-facing entrace. Therefore, if we could differeniate ourselves through a seperate address that would hopefully stop any confusion (i.e. 'Number 1' and 'Number 1a').
If anyone has an experience of creating a new address for an existing building (i.e. spliting a building in two for address purposes) that would be great.
Thanks,
The Doctor
To answer a few points: We own the entire building. The area we are looking to rent out has it's own toilets and kitchen and is essentially self contained. We have plently of car parking spaces so we can use them to negotiate with.
We will probably look to offer an inclusive rent with the utilities (the area does however have it's own circuit and data wiring).
The main reason for the rating unit split would be to save on rates when it's unoccupied and so the cold smaller unit attract rate relief (if this worked out to lower the rates cost overall).
Therefore if there overall rates for the whole building (both sides) could be lowered due to unoccupied discount (for the first 3 months if unoccupied) and rate relief (longer term) of the split-off part, we would save regardless of whether we rent on a rates inclusive basis or not (at a rough guess I would think the rateable value for the seperate unit would be in the region of 9 - 10k so would attract some relief).
Would anyone know if the vaulation office give quotes for this sort of thing or is it a case of they will only give you a rateable value if the change is implemented?
Also, with regards to the post situation, our entrance (or rather, where we want the post delivered) is nowhere near the original street-facing entrace. Therefore, if we could differeniate ourselves through a seperate address that would hopefully stop any confusion (i.e. 'Number 1' and 'Number 1a').
If anyone has an experience of creating a new address for an existing building (i.e. spliting a building in two for address purposes) that would be great.
Thanks,
The Doctor
Business rates is my field.
Historically leaving it as one assessment would have worked without hassle. However its likely that this is going to come more unlikely in the future, mainly because entries in the Rating List are going to be studied in great detail to ensure everything is assessed and it sounds to me as if you would definitely have 2 assessments if the VO were to inspect.
The issue with 2 assessments is that the sum of the two is likely to be greater than a single assessment However the advantages are the 3 month exemption when it becomes empty, and its possible the let part may qualify for small business relief.
As regards an estimate either post the address details or pm me and I'll have a look.
Historically leaving it as one assessment would have worked without hassle. However its likely that this is going to come more unlikely in the future, mainly because entries in the Rating List are going to be studied in great detail to ensure everything is assessed and it sounds to me as if you would definitely have 2 assessments if the VO were to inspect.
The issue with 2 assessments is that the sum of the two is likely to be greater than a single assessment However the advantages are the 3 month exemption when it becomes empty, and its possible the let part may qualify for small business relief.
As regards an estimate either post the address details or pm me and I'll have a look.
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