Small print causes big issues as leasing overtakes purchase

Businesses more used to purchasing property than leasing premises are finding that the small print in contracts is causing big headaches.

Commercial property lawyers at Cheshire’s biggest law firm, SAS Daniels LLP, say that a huge swing away from purchase to short-term leasing is meaning businesses are coming across conditions they simply wouldn’t see if they were buying.

SAS Daniels LLP solicitors has offices in Stockport, Macclesfield, Chester, Congleton and Bramhall.

“The worst case we’ve seen is of a business that took out a very short-term lease, didn’t read the small print, but then were hit for the cost of the re-surfacing of the shared car park – a once-every-15-years matter – and then when they left the premises found they had to virtually completely refurbish the building way above and beyond the condition in which it was when they moved in,” said Becky Simpson of SAS Daniels LLP.

“That was a particularly bad case, and a result of not involving commercial property solicitors when they took out the lease, in which case most of the conditions would have been at worst re-negotiated and at best removed completely from the agreement.

“There are a few areas to watch out for when taking out a lease.

“Service charges: who pays what? This can be anything from gardening, through to minor maintenance or major cyclical work such as re-surfacing driveways or car parks.

“Dilapidations: a lease will say that at the end of the agreement the property has to be vacated in good repair. The landlord will ensure that the building is inspected, and that the building is put back into a condition as agreed in the leasing agreement.

“However, this is where one of the most common mistakes is made: if a lease is not read carefully it can be that the tenant is obliged to put the property into a condition that was far better than when they moved in.

“A tenant needs to understand their obligations – crucially, they should consult a solicitor who will in most cases advise them to bring in a surveyor to report upon and record the condition of the building when the tenant moved in: that is the benchmark condition to which the property should be returned.

“If not, then they could end up replacing windows that were rotten when they moved in, even re-wiring or re-plumbing.

“A surveyor may cost £500 or so – but by recording the condition of the building at the time the tenant moved in, it could save thousands of £s when they move out.”

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