We all love Hitchin – the quirky buildings, range of independent and national businesses, and the very social nature of the town. What can we do to keep that diversity of business, apart from encouraging people to shop locally?
By following the tips below you can ensure your property costs are as low as possible, making sure your business is sustainable.
The key is NEGOTIATION – you can do this yourself but like anything if you have expert advice you will reap the benefits.
1. Ask for a RENT FREE PERIOD before signing a lease. This is common practice, and the longer the lease, usually the longer the rent free period granted.
2. Before signing a lease, NEGOTIATE THE RENT. Rent that you pay will be used as evidence against other businesses when they have a rent review or lease renewal, and vice versa. The more that tenants negotiate the better it is for all businesses in keeping rents down.
3. RENT REVIEW: If the landlord gives you notice that he is putting the rent up, NEGOTIATE. Research other rents in the locality, and look at whether your premises or your lease has any disadvantages compared with the other units. Is your sales floor split level? Is your lease longer than the standard? These are just some of the aspects that could reduce your rent.
4. LEASE RENEWAL: You may be able to REDUCE YOUR RENT if you renew your lease. Like rent reviews, you need to look at what comparable rents are, but on a lease renewal your rent can go down as well as up.
5. BUSINESS RATES: Look at the possibility of appealing. Be careful though as rates can be revised upwards as well as downwards. Are you getting any small business rates relief you are entitled to?
6. SERVICE CHARGE: Before completing a lease, check if there is a service charge. What does it cover, and will you benefit from those services? If not don’t agree to that part of it. Is the building already in a poor condition? If so you should agree a cap on the service charge provision. This way you know your service charge will be a fixed maximum amount. Check that what has been charged for on your service charge bill matches what the lease allows. If it doesn’t, you can challenge it. If it is your liability, is it an excessive bill for a small job? You can challenge this too.
7. BUILDINGS INSURANCE: Does your landlord charge you for buildings insurance and has he billed you correctly? Ensure you are only paying for the right amount as per the lease.
8. REPAIR COSTS: Have you factored in costs for repairing the building? You may be taking on responsibility for putting the property into good repair and this could include major works, such as repairing the roof. Agree a Schedule of Condition with the lease as this limits your liability. A small outlay could save you thousands of pounds at the end of the lease.
9. DILAPIDATIONS: At the end of the lease you may be served with a Schedule of Dilapidations. Check this – does it accord with the lease provisions? Are the costs reasonable? A dilapidations claim can be reduced significantly, so you should always seek advice.
10. BREAK CLAUSES: Many tenants agree break clauses in their leases, but they can be notoriously difficult to use to break the lease. DON’T LET THIS HAPPEN TO YOU. Make sure that you get expert advice on what the break clause conditions should be and get those agreed before signing the lease.
“Kirsty Harvey runs KTD Surveying and specialises in advising businesses on how to negotiate their property leases and keep costs down.”
If you would like to discuss any of these aspects further, please call Kirsty Harvey of KTD Surveying on 01462 820092 for a free no obligation consultation.