by MCM

Created on: June 06, 2009   Last Updated: June 10, 2009

The emotions felt when committing to a lease of a business premises can be a heady cocktail of excitement and terror. To help reduce the element of terror in this mix, it is advisable to obtain legal advice before signing on any dotted lines. Of course, it is always helpful if you are somewhat knowledgeable on the subject too. The following are a few of the key issues your solicitor will look out for.

1. Costs

Who is paying whose costs? It is usual that the landlord will have his legal costs paid by the tenant. This can, and always should, be limited to a reasonable figure. It is of course possible to negotiate alternatives to the usual approach.

2. Length of the lease

Business leases are traditionally longer than personal leases, and normally last between three and twenty years. For a start-up company it can be quite daunting to commit to such a length of a lease. In such a case, an alternative option such as working from home may be preferable. Landlords are generally reluctant to lease for shorter periods, although in the current economic climate they will negotiate more readily. A shorter lease, maybe on a monthly or weekly basis, will give you maximum flexibility, but will be less secure, may work out more expensive, and will give you less scope for modification of the premises.

3. Early Termination Clause

Effectively, this clause allows you to buy out of the lease. A specific lump sum is agreed, payment of which enables you to walk away from the lease prior to it ending.

4. Interest on the security deposit

Security deposits are understandably necessary for landlords, and a standard requirement. Try to negotiate that it will accrue interest which is payable to you. Otherwise, your security deposit is effectively an interest free loan.

5. Use of premises

Very importantly, your solicitor will have to establish whether the premises can be used for the purpose of your business. To do this you must contact your local authority in order to establish the approved use of the building under its planning permission. If the approved use of the building differs to that of your business, your solicitor should be able to apply for a change of use. Such an application is not guaranteed to be successful - for example, an application to establish a pub in a solely residential area is unlikely to succeed. Your solicitor should also ensure that there are no restrictions on the use of the premises contained in the lease.

6. Listed building

While operating a

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