Property Advice

[Pot Bellied Fool]

Hi Folks

As ever, open to advice & picking of brains of the PH collective...

I'm fairly well established (Ltd Co, one man band + freelancers as req'd) and involved in PC Repairs as well as other areas of industrial electronics/electromagnetics.

I'm in a small industrial unit at the moment (300sq ft) which - although it needs a damn good tidy out - I've really outgrown.

I want somewhere larger, that will enable me to operate partly office, partly workshop & offer a 'repair centre'/showroom facility for retail PC repairs/system sales etc.

So starting to cast my beady eyes around for larger premises.

My present place is purely rented and is easy in/easy out with simple notice.

But very few places I'm seeing (just checking on-line at the moment to get a feel for costs) are on this basis & are usually leased on full repairing and insuring terms.

So...

Opening it up to you all - what do I look out for? What are the usual 'gotchya's? Potential pitfalls? Any golden tips for finding places? How easy is it to negotiate better terms/refurbishments in the current market state?

I'm on Merseyside and plans are for something upto 1000sq ft, either a publically accessible unit on an industrial estate or a retail frontage but not necessarily High St (couldn't afford those sort of prices!).

Cheers - PBF.

[FUBAR]

Will come down to primarily position/condition of the unit and length of lease offered/remaining. Obviously if its in a good position, is in good condition and is new to the market it will be harder to negotiate a rent discount and/or rent free period than say some shed thats falling down in the back of beyond thats been on the market for months. The ability to negotiate will also take into account whether its a new lease being issued by the freeholder or taking a lease assignment from someone already stuck with a lease on the place.

If its in a crap state, get a Schedule of Condition done so the landlord cant shaft you at the end of the lease and make you put it back in better condition than when you take it. Rent free periods are normally negotiated where the property has been empty for ages or is in poor condition and the tenant agrees to make improvements in lieu of rent (hence the 'rent free') NB IIRC if you do substantial works to the property, resulting in substantial more floor area (build and extra unit on etc), and paid for at your own cost (you will need landlord's permission for this) then as its a tenants improvement, the landlord cant charge you rent on the extra bit. If the landlord does the work, or pays for it, then they are entitled to receive rent at the going rate.

You cant just walk away from an FRI (Full Repairing and insuring) lease or its liabilities like you can on your current tenancy agreement. Also worth asking about trying to negotiate a 'tenant only break clause' giving you the option of getting out early at set times in the lease (normally 5/10 years). Sitting on the other side of the table as I do, most landlords detest break clauses, but they are more and more prevelant in negotiations these days.

Im sure someone will be along to point out my errors and/or give further advice

[Pot Bellied Fool]

Great info, thanks Fubar.

It's the 'new' things like FRI & break clauses etc that I was looking for more info on so that's actually quite a help.

If the place is in fair condition, is it still worth getting a surveyor in to do a schedule? Or would just taking some photos do the trick? I think it's only been vacant a couple of weeks - in the case of one I've got a beady eye on.

Also... "The ingoing tenant will be responsible for the payment of the landlords reasonable agents and legal fees." Is this a usual expectation or a bit of a try-on? Any idea what the fees are likely to be for a small retail unit costing about £8k pa?

Many thanks for the help, just trying to get some figures & what-if's done before knocking on doors - it helps if I know what I'm talking about (or can at least bluff!) first.

Cheers - Dunc.

[FUBAR]

Pot Bellied Fool said:

Great info, thanks Fubar.

If the place is in fair condition, is it still worth getting a surveyor in to do a schedule? Or would just taking some photos do the trick? I think it's only been vacant a couple of weeks - in the case of one I've got a beady eye on.

The lease wording will be fairly vague at a guess. Normally something like " Lessee to return property in 'reasonable' condition". You will probably have a redecorating schedule in the lease stating "to clean and paint the exterior every X (3?) years and interior every X (5?) years" etc, so in 'theory' you should be keeping the property in good condition anyway. I would definitely ask for some agreed digital photos to be attached to the lease if not go the whole hog and get a SoC done.

Pot Bellied Fool said:

Also... "The ingoing tenant will be responsible for the payment of the landlords reasonable agents and legal fees." Is this a usual expectation or a bit of a try-on? Any idea what the fees are likely to be for a small retail unit costing about £8k pa?

.

'Normally' each party to bear their own costs. Not unknown for owner to ask for these costs to be covered by lessee but normally a good point to negotiate out (a little trick from the owners side, add something like these costs in then the tenant feels better when the landlord says "wont lower rent/give rent free but, 'as its you', each to pay their own fees, etc if you sign on the dotted today" )

Again, its all relative to specific properties. If its a great unit, in a great spot, only just on the market, the freeholder may stick to his guns for a bit and see if anyone else will pay the fees.

FYI the agents fees on that would probably be around £12-1500 and solicitor's fee anything from £500-1500.

Edited by FUBAR on Wednesday 10th January 16:50

[Davel]

I'd still get a surveyor involved for a new lease or at the very least get a 'Schedule of Condition' agreed and with photos. Get a solicitor to also check over any proposed lease.

You don't want to be in the position where you have to leave the unit in a better state than when you entered it.

There are some Landlords out there who, at the end of any lease, will try and milk you for all you're worth.

With any new lease, I'd also ensure that you have a certificate confirming the state of the electrics etc before you move in, but a surveyor can help you in this respect.

There are some areas around you where grants are available for certain things, so check up with your local Council.

I'm in Widnes and have recently got 40% grants for extra CCTV work, planting prickly bushes around our perimeter fence, double glazing the offices etc.

Good luck!

Edited by Davel on Wednesday 10th January 17:06

[srebbe64]

Personally, I much prefer to own than to rent. That way you don't have any irritating clauses and you have options to own it via a self administered pension scheme, so it becomes a Tax efficient investment as well as a property to run your business from.