Contracted In or Contracted Out business lease. Which one?
Discussion
As per heading.
The lease on our workshop is up for renewal. Its always previously been for fourteen years and Contracted In and we have been here for 28 years. However now its up for renewal the new company that now manages the Industrial estate are pushing for a contracted out lease.
The latest lease can only be taken over a maximum of 10 years, and I am unsure which way to go. As an insentive to take out a Contracted Out lease the management company will freeze the rent for five years or more, yet will only freeze the rent for three years (they are investing in a new roof but putting the rent up by 11% either way) if we stay contracted in.
We are a woodworking company and obviously have invested a large amount of money in dust extraction, machinery and heating. The industrial estate is in a beautiful part of the Cotswolds and is an old WW2 army base............ I'm a little worried (though have no hard facts) that in the future they may want to redevelop it for housing so am a little unsure quite what the furture motives of the landlord are.
I'm 47 years old, I can see me still working for at least another 15-17 years. Everything from dust extraction to heating should last this amount of time so I do not want to be moving in the future if I can help it.
Thoughts please and any help appreciated. I'm unsure what is for the best as I really have no idea what the difference, positives or negatives are.
The lease on our workshop is up for renewal. Its always previously been for fourteen years and Contracted In and we have been here for 28 years. However now its up for renewal the new company that now manages the Industrial estate are pushing for a contracted out lease.
The latest lease can only be taken over a maximum of 10 years, and I am unsure which way to go. As an insentive to take out a Contracted Out lease the management company will freeze the rent for five years or more, yet will only freeze the rent for three years (they are investing in a new roof but putting the rent up by 11% either way) if we stay contracted in.
We are a woodworking company and obviously have invested a large amount of money in dust extraction, machinery and heating. The industrial estate is in a beautiful part of the Cotswolds and is an old WW2 army base............ I'm a little worried (though have no hard facts) that in the future they may want to redevelop it for housing so am a little unsure quite what the furture motives of the landlord are.
I'm 47 years old, I can see me still working for at least another 15-17 years. Everything from dust extraction to heating should last this amount of time so I do not want to be moving in the future if I can help it.
Thoughts please and any help appreciated. I'm unsure what is for the best as I really have no idea what the difference, positives or negatives are.
Jobbo said:
If you're currently contracted in, they can't compel you to take a contracted out renewal lease. They can only incentivise you. You should take specific advice about how much you may be giving up, but based on the length of your occupation you'd be entitled to double the rateable value as compensation if the landlord forced you out to redevelop; don't give that up lightly (and by taking a contracted out lease, you would be giving that up).
Thanks for that. This was my worry, it does seem I am more secure staying Contracted In. My biggest worry was if they tried to bump the rent up alot after three years. I've also just noticed they are trying to push through for a 6 year lease, not the 10 years I asked for.Gassing Station | Business | Top of Page | What's New | My Stuff