Thinking of signing a commercial lease? Treat it like a marriage, not a first date.

Finding the perfect premises can be exciting.

The location is right. The rent looks affordable. You can already picture your business operating from the space.

When that happens, it's easy to focus on getting the keys and moving in.

But here's something we regularly tell clients:

Everyone starts with the best intentions, but the terms you agree at the beginning become very important if circumstances change later.

Your business may grow, shrink, relocate or change direction. Your landlord may sell the property. Costs may increase. What seems like a straightforward agreement today can become a very expensive problem in a few years' time.

The old saying "marry in haste, repent at leisure" applies surprisingly well to commercial leases.

Before signing on the dotted line, here are seven questions every prospective tenant should ask.

1. How long am I really committing for?

   A lease isn't just about where your business is today. It's about where it might be several years from now.

   A longer lease may give security and allow you to invest confidently in the premises, but it can also become restrictive if your business expands rapidly, needs less space, relocates or encounters financial difficulties.

   We've seen businesses sign ten-year leases because the rent looked attractive, only to discover three years later that they desperately need larger premises but are still tied into the existing lease.

   Think carefully about whether the lease term fits your future plans, not just your current circumstances.

2. Is there a way out if things change?

   Many business owners assume they can simply give notice and leave if the premises no longer work for them.

   Unfortunately, commercial leases rarely work that way.

   A break clause can provide valuable flexibility by allowing the lease to end early, but break clauses often come with strict conditions and notice requirements.

   Miss a deadline, fail to serve notice correctly or fail to comply with a break condition and you could find yourself committed to the lease for much longer than expected.

   If flexibility is important to your business, make sure you understand exactly what exit options are available before you sign.

3. What am I agreeing to repair?

   This is one of the areas that catches tenants out most often.

   Many people assume they are only responsible for keeping the premises tidy and carrying out minor maintenance. In reality, some leases place extensive repair obligations on tenants.

   Depending on the wording, you could become responsible for repairing parts of the building that were already in poor condition when you moved in.

   An older building with an attractive rent can sometimes come with significant repair liabilities hidden beneath the surface.

   A building survey and a properly prepared schedule of condition can often be worth their weight in gold when discussions arise later about the property's condition.

4. What will the premises really cost?

   Rent is usually only the starting point.

   In addition to the rent itself, a tenant may also be responsible for business rates, service charges, insurance contributions, utilities, VAT, professional fees, rent deposits and various other costs.

   Some leases also contain rent review provisions, meaning the rent can change during the term.

   Before taking on any premises, it's important to understand the total annual cost rather than focusing solely on the headline rent figure.

   Sometimes the cheapest premises on paper turn out to be the most expensive in reality.

5. Can I actually use the property for my business?

   Just because a property looks perfect doesn't necessarily mean you can use it in the way you intend.

   Commercial leases often contain restrictions on permitted use. There may also be planning considerations or other legal requirements affecting how the premises can be occupied.

   For example, a property may be ideal for a café, gym, clinic, workshop or retail business, but that doesn't automatically mean the lease and planning position allow that use.

   It's much better to identify these issues before signing than after committing to a lease and discovering your proposed business activities are restricted.

6. Can I adapt the premises to suit my needs?

   Most businesses want to put their own stamp on a property.

   You may want new signage, additional equipment, a different layout, partition walls or refurbishment works.

   However, many commercial leases restrict alterations and require landlord's consent before any works can be carried out.

   What often surprises tenants is that even where alterations are permitted, they may later be required to remove them and restore the premises to their original condition when the lease ends.

   It's always worth considering not only the cost of fitting out a property but also the potential cost of undoing those works in the future.

7. What happens when the relationship ends?

   When businesses take on new premises, most of their attention is understandably focused on moving in.

   Much less thought is given to moving out.

   However, the end of a lease is often where significant liabilities arise.

   Depending on the lease, you may be required to repair the premises, redecorate, remove alterations or pay compensation for breaches of your obligations. These claims are often referred to as dilapidations and can come as an unpleasant surprise to tenants who thought they had simply reached the end of their tenancy.

   It is also important to understand whether you may have rights to remain in the premises and seek a renewal lease when the term expires, as not every business tenancy is treated the same way.

   Understanding the exit position at the outset can help avoid expensive disputes later.

   The best time to negotiate a lease is before you've signed it.

   Once you've committed to a commercial lease, your options become much more limited.

   Many of the issues above can often be negotiated before completion. They can be significantly harder, and significantly more expensive, to address afterwards.

   That's why taking advice before signing is almost always cheaper than trying to fix a problem several years down the line.

At MBH Solicitors, we regularly advise both landlords and tenants on commercial leases and help businesses understand exactly what they're signing up for before they commit.

If you're considering taking on commercial premises, we'd be happy to review the proposed lease and explain the practical implications in plain English.

🌐 www.wigansolicitors.com
📞 01942 206060
📩 mbh@wigansolicitors.com