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Entering into a Jersey Commercial Leases – some points to consider

Commercial Leases  | Jersey Business Legal Services

When considering moving into Jersey commercial premises, there are plenty of points to consider.  Most tenants assume that once the commercial premises has been found, the negotiation of the lease is a small matter. However, one of the most important aspects when moving into a new premises is the commercial lease.

There are many pitfalls in a commercial lease and here are a few fundamental points to consider:-

Use of Premises

You need to ensure that the lease allows you to use the premises for your intended purpose.  Although this sounds simple enough, it is an easy trap to fall into, especially if your business is to alter or add a different arm at a later stage.

For example, you may open a retail shop and as your business progresses you may want to add a café.  This may not be possible without renegotiating the lease and of course obtaining the appropriate consents.

Other points to consider, and keep in mind, is not to assume that the stated use for the premises is comprehensive.  For example, the use defined may be for a restaurant; however, there may not be an allowance in place for off-premises consumption.

Length of Lease

For a new business, in particular, there are many risks and uncertainties. Therefore, it would not be advisable to initially commit to a long lease, as once entered into it is difficult to exist prior to its termination, without paying a penalty.

You may want to get a short term lease which can be renewed.

Break Clause

It is always a good idea to have a break clause, which allows you to terminate the lease at certain intervals prior to the end of the lease.

Costs and repairs

If you are liable for any repair work (internal or external) you should ensure you have checked whether the building is in good repair and raise any concerns in writing. It is a good idea to document the state of the property when you move in and agree it in writing with the landlord, otherwise you could be liable for refurbishing it at a later date.

You also need to be aware that you will be responsible for inherent defects, which includes any design faults in the structure. Therefore if you are taking a long lease it would be advisable to have a detailed survey before signing it.

Limiting dilapidations liability

Dilapidations mean disrepair of the property.

Dilapidations responsibility should be clearly set out in the lease, stating both the landlords and tenants responsibilities.

The lease should clearly state whose responsibility it is to repair the dilapidations on termination of the lease. We would strongly advise you to obtain a condition report in relation to the premises at the commencement of the lease, to prevent any potential disputes at the end of the tenancy.

In addition be cautious that the landlord does not exempt him and/or herself from all liability and as a result does not thrust a full repair liability clause on to you, the tenant.

A commercial lease is legally binding, with pitfalls to place the burden on the tenant.  Therefore we would always recommend you to seek legal advice prior to signing a commercial lease.

For advice, assistance or further information on your commercial lease please do not hesitate to call 630530 or email us on comprop@parslowsjersey.com

Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows Jersey accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer at Parslows Jersey in the event that you require professional assurance that our information, and your interpretation of the same, is correct.

Parslows Jersey are here to help with all your legal queries call us today on +44 (0) 1534 630530

Or email us on enquiries@parslowsjersey.com