This is the last in a series of three articles encouraging businesses to ensure that their property paperwork is in order.
This week we consider additional ways to protect your business from unforeseen circumstances and how to enhance your position should an unexpected opportunity arise.
Dealing with Dilapidations and Repair
- To establish whether there is anything which could leave you open to a claim for disrepair:
- check your obligations
- check whose responsibility it is to put defects right
- If the property was a new build or has recently undergone substantial renovation or refurbishment:
- disrepair resulting from latent or inherent defects may be covered by a builder’s or contractor’s warranty
- any warranty claims will need to be pursued within the limitation period
- If you are vacating a property or looking to sell your property or business, hoping to underlet or assign (transfer) your lease:
- is your landlord taking a reasonable stance on dilapidations?
- is your property in a marketable state?
Insurance
It is important for all owners and occupiers of commercial property to establish:
- Whose responsibility is it to insure the property.
- What the terms of the policy are:
- if you are renting a property and the landlord is responsible for insuring it might be worth requesting a copy of the policy
- if the risks are not comprehensive (depending on the terms of the lease) you may be able to ask the landlord to increase the cover
- Whether your own insurance is adequate and covers business interruption and third-party liability as well as your belongings, equipment, your fixtures and fittings etc.
Outgoings and Cashflow
- If the rental value has decreased since the last rent review or the start of the lease it might be worth trying to agree a rent reduction with the landlord.
- Asking to change the timing of rent payments (for example from quarterly to monthly) could help with cash flow.
- If you are renting a property on an estate or within a building and you pay a proportion of the service charge which is not capped or fixed, it is worth checking that the provisions are reasonable and that the budget represents good value for money, especially in light of the new RICS professional statement regarding service charges in commercial property.
- If you are successful in negotiating any variations to the terms of your existing lease, ensure that the changes are documented and registered:
- to protect your interest
- to avoid any misunderstandings later
If you have any queries or would like us to assist you to resolve any matters or to deal with a potential transaction, please do not hesitate to contact us.
This article is not a definitive statement of the law. It is designed as a free update on the law at the time of publishing. It is not a substitute for legal advice on specific facts and circumstances. BakerLaw LLP and/or the writer accepts no liability or responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.
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