This cheatsheet includes practical tips to understand key clauses and avoid disputes in leasing agreements.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n When choosing a suitable property to lease, the rental amount is often the key figure in your mind. However, this is not the only cost consideration to note. We explore common ones below. <\/p>\n\n\n\n The rental amount is typically the highest cost associated with a commercial lease. Rent costs tend to reflect the amount of property space you will occupy, as well as other factors like the location and quality of the property.<\/p>\n\n\n\n When considering rent costs, check whether the commercial lease agreement has a rent review clause<\/a>. This clause allows the commercial landlord to assess the rent price periodically with the view to raising it. If a rent review clause is present, you will need to consider the possibility of a rent increase later down the line, so find out:<\/p>\n\n\n\n When you choose a commercial premises and enter a commercial lease, you will sign your lease agreement and pay a deposit to secure the property. A deposit typically amounts to three to six months\u2019 worth of rent. This is an upfront cost consideration when choosing your commercial premises, so you need to have an amount readily available from your business. <\/p>\n\n\n\n A further cost consideration for commercial tenants is the cost of business rates. The rental value of the business premises will determine these. You should consider whether your business is making enough profit to meet these payments. <\/p>\n\n\n\n When you enter a commercial lease and occupy a property, you will incur service costs such as gas, internet and electricity. You may pay these independently or through a service charge that your landlord will bill to you. Typically, the latter will occur where your commercial premises is in a shared building. <\/p>\n\n\n\n A service charge will include costs for the upkeep of shared parts of the building, such as:<\/p>\n\n\n\n You will likely need to pay insurance when you enter a commercial lease. In addition to content insurance which protects your possessions, your lease might require you to pay building insurance. <\/p>\n\n\n\n Further, review the lease agreement regarding your repair obligations<\/a>. These can be onerous in some commercial leases, such as where you have a full repairing and insuring lease (FRI). This requires you to bear all the repair and insurance costs of the lease. Therefore, this is a cost you must consider when choosing a commercial lease. <\/p>\n\n\n\n Another cost you may not initially consider when choosing a commercial premises are those associated with seeking your landlord\u2019s permission for certain actions. Your lease agreement might state that you need consent from your landlord to:<\/p>\n\n\n\n Where any of these actions require your landlord\u2019s permission, the lease agreement may detail that your landlord can recover the costs for the request or charge for it.<\/p>\n<\/div>\n\n\n\n In addition to all the cost considerations when you choose a commercial lease, you must consider potential VAT on top of these. Depending on the property you select, you may have to pay VAT where the landlord is VAT registered and decides to pay tax on their property. This could be payable on your rent and service charge, for example, so consider this additional figure before signing the lease agreement.<\/p>\n\n\n\n When you choose a commercial lease, you will likely incur initial costs for a solicitor to help negotiate and review the draft lease agreement. This cost can vary depending on the clauses in the commercial lease agreement.<\/p>\n\n\n\n You may also need to consider professional fees if you select a long-term lease, in particular, requesting a surveyor to examine the property before entering into the lease.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nCommon Cost Considerations <\/h2>\n\n\n\n
Rental Amount<\/h3>\n\n\n\n
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Security Deposit <\/h3>\n\n\n\n
Business Rates<\/h3>\n\n\n\n
Service Charges<\/h3>\n\n\n\n
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Repairs and Insurance<\/h3>\n\n\n\n
Costs to Seek Your Landlord\u2019s Permission<\/h3>\n\n\n\n
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VAT<\/h3>\n\n\n\n
Professional Fees<\/h3>\n\n\n\n
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\n Cheatsheet for UK Leasing Terms<\/div>\n
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