Whether you are a smaller business or a larger venture, most businesses will face similar issues when leasing office space in Jersey. All leases are complicated documents, potentially full of pitfalls, which an untrained eye may not pick up.
Head of Terms
Get some advice from a lawyer as to the points you should consider when negotiating with the Landlord regarding leasing office space. You should be aiming to agree what is called the ‘head of terms’. This document is not binding, but it allows the lawyers to ensure that the lease reflects what you have agreed: the lawyers acting for the Landlord can draft the lease and the tenants lawyers can use this document to ensure that they have followed the agreed terms.
Leasing Office Space – Here are a few issues you should consider when negotiating the lease.
Planning Consent – Use
You must always make sure that you are allowed to use the property as an office. The Jersey Planning department strictly regulate the use of all buildings in Jersey. It is not uncommon to discover tenants occupying property and leasing office space without appropriate use consent.
You need to consider service charges. This is a cost usually found in a commercial lease and allows the landlord to recoup additional costs from you. In general terms, Jersey leases will contain such a clause. As such, consideration should be given to limiting your exposure to these costs.
You should be careful to consider what responsibilities you have in relation to repairs and decoration. Never underestimate how much it may cost to maintain and keep your office space in good repair. It is always good practice to request a schedule of condition at the outset, so you can use this as a benchmark.
You will need to consider what works are required to furnish the office. All leases will have considerations as to what you can and cannot do regarding works at the premises. Generally tenants will need permission to carry out works and this not only from the Landlord but also from Jersey planning and building control. This will include partitioning.
While stating the obvious, you need to ensure that you have permission to carry out the works you plan (at least in principle) before you enter into the lease.
Rent Free Periods
If your office requires a fitting out, this can be time-consuming and may prevent you from using the space, notwithstanding having taken on the lease. As such, you should be considering asking the landlord for a rent free period. You should encourage your potential landlord to work with you to make the business a success, so you can both benefit in the long term.
Right to assign
You should always ensure a right to assign the lease. That way, you know that you won’t have to find a way of keeping up with rental payments until the end of the lease for a property you would rather be without.
There are numerous other issues to consider, but this overview should give you an idea of the points to look out for. However, please remember that legal advice at the outset could save you money and angst in the future.
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