The terms of a commercial lease can be onerous and to the uninitiated you may not even realise the hidden dangers. In the interests of your business you should always consider taking legal advice and advice on the structure of the property before entering a commercial lease.
Here are five headline issues you should always bear in mind.
You are no doubt an expert in your business. Lawyers and surveyors likewise are experts in theirs. It is their job to analyse draft leases and review structures of properties. Remember the old adage ‘what you don’t know you don’t know’. Commercial leases can spread over 50 or 60 pages. Is it in your best interests to cut corners and enter into a commercial lease without knowing exactly what you are entering into?
You need to consider your business plan. Is the square footage at the property enough for the foreseeable future. Is it in the right location. Take a step back and think about this. Once you have signed the commercial lease it is not just a simple process of handing back the keys if you decide to move to bigger premises.
Again you need to carefully consider the implications of entering the Jersey commercial lease. Will you project enough business, how much of an impact will the rental have on your bottom line, are there service charges and if so what is the extent of these?
Jersey law dictates that a lease is either defined as a paper lease or a contract lease. The first is under 9 years, the second is 9 years and above. If you plan to enter a commercial lease you need to weigh up the period of time you want the property for and consider carefully what to do if you do need to relocate. Consider requesting a break clause in the lease and/or whether you should have a shorter lease (especially if you are a new start up).
As said above, a commercial lease can be a weighty document. It is vitally important that that you are aware of the terms, especially your maintenance repair and or decoration obligations, before entering a commercial lease. If you do not consider these carefully you may find yourself having to pay large bills at the end of the commercial lease term to repair and or replace the landlord’s property. Depending on the issue, this could wipe out years of hard earned profit.
Author: Carl Parslow
Parslows Jersey can help
We support Jersey businesses with cost effective Jersey legal services. If you choose to work with us, we will provide you with fixed fees, which we will stick to. We know that Jersey businesses have to carefully manage their budget. Whether we’re advising a Jersey start-up company or an established Jersey business, we always start and end with what is in your commercial interests.
Parslows Jersey Business Legal Services team is small enough to care but big enough to trust.