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Why Should a Commercial Tenant Obtain a Survey of Commercial Premises?

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As a commercial tenant, when you commit to a commercial lease, you make a financial commitment, often for several years, depending on the lease end term date in the lease agreement. Therefore, you want to be sure of the commercial property you wish to take on. To do this, you may require the help of a qualified building surveyor to carry out a commercial property survey of the premises. This article will explain why you may choose to get a survey of your commercial premises in the UK.

Commercial Lease

A commercial lease is where a property owner allows a business to occupy their property for a specific lease term. The landlord will let particular business activities take place on the premises. You, as their commercial tenant, will pay them rent in return for your occupation. 

A commercial lease agreement governs a commercial lease and details all the lease obligations and rights of you and your commercial landlord. 

Survey

When a building surveyor carries out a complete building survey on a commercial property, they will:

  • assess all parts of the premises that they can access;
  • detail the condition of the building fabric and mechanical installations;
  • detail the condition of the roof and drain pipes;
  • provide a report of what the defects are; 
  • provide a report on health and safety;
  • detail what urgent repairs are necessary;
  • state the time repairs will take; and
  • provide a cost for the work.
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Assess Condition   

As a commercial tenant, you may request a pre-lease survey of a commercial premises to assess its condition before you sign any agreement.  

You may also request that a surveyor conduct an inspection and provide detailed reports, such as a photographic schedule of condition. If you proceed with the commercial lease, you can ask your landlord to include the latter in the lease agreement.

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Understanding the actual condition and state of repair of the commercial property before you sign a commercial lease means you know what you will commit to. This is important in terms of obligations in the commercial lease agreement. These are specifically the lease clauses that concern the maintenance and repairs of the property.  

These often obligate you as a tenant to leave your commercial premises in the same or even better repair when you leave it at the end of your lease term. As a commercial tenant, you want to avoid unexpected repair costs.

Also, you can ask a building surveyor to assess the commercial property’s condition so that you can determine its viability for the business activities and plans you have for it. You may, for example, want to use the property as a:

  • shop;
  • restaurant;
  • office; or
  • place for leisure activities.   

Local Searches Within a Survey

When you decide to lease a property as your commercial premises, you may wish to do some fact-finding on it first. This can involve local searches, which a building surveyor can do for you. These give you information about past issues with a property and its surrounding areas, such as:

  • road works;
  • new developments;
  • risk of floods; and
  • liabilities you may have to pay for the upkeep of local churches.

Rent Review

If your lease has a rent review clause, your landlord must periodically review the rent amount you pay them. The clause will detail when they will do this and their rent review method.

When your rent review is due, you may ask a surveyor to survey your commercial premises. This will give you an idea of the current rental value of your business property. Accordingly, if you believe your commercial landlord suggests an unfair rental price, you have evidence to back this up during any rent review appeal process.

Key Takeaways

If you are a commercial tenant or a business owner about to sign a lease agreement, consider using a chartered surveyor to survey the property. A commercial lease is a significant commitment for your business, so you want to know complete details about the property it concerns.

There are various reasons you may wish to get a survey. You may want to assess the condition of the property to understand the extent of some of the lease obligations you commit to. You can also ensure that any rent change following a rent review fairly reflects the property’s value.

If you need help understanding the benefits of a pre-lease survey for your UK commercial lease, LegalVision’s experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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