What to consider when negotiating a Jersey business lease

What to consider when negotiating a Jersey business lease

When you find a Jersey property that meets your Jersey business needs, it is tempting to sign the lease and get moving without analysing the terms. Rushing into an agreement without being certain that it benefits you as a business can potentially leave you with problems after the lease is signed.

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 advice both on the terms of the business lease and also on the structure of the property before entering a commercial lease.

There are five headline issues you should always bear in mind

Make sure you understand the terms and conditions of the business lease before you sign the lease

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?

Does the Lease suit your requirements and is it future proof for your requirements?

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.

Can you afford the lease?

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?

How long do you want the lease for?

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).

Know what your obligations are before you sign

As said above, a commercial lease can be a weighty document. It is vitally important 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.

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.

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