When it comes to opening a new business, one of the most important decisions you'll make is choosing the right location. Once you've found the perfect location, the next step is negotiating a lease. This can be a daunting task, but with the right knowledge and preparation, you can ensure that the lease works in your favour. In this article, we'll cover the most common and important terms in a lease and their potential impact.

First, let's talk about lease length and break clauses. The lease length is the amount of time you'll be renting the property, and it's important to consider how long you anticipate being in business. You'll also want to consider the option of a break clause, which allows you to end the lease early if certain conditions are met.

Next, let's talk about rent and rent reviews. Rent is the amount of money you'll be paying to the landlord each month, and it's important to consider how this will impact your budget. Rent reviews are a way to adjust the rent based on market conditions and are typically done halfway through a lease.

Incentives and premiums are other important points to consider. Incentives are benefits offered by the landlord to entice you to sign a lease, such as free rent or capital contributions. Premiums are a lump sum payment that is usually required in addition to the rent.

Guarantees are also important terms to consider. Guarantees are a way to ensure that the landlord is protected if you default on the lease, as a named company or person will be responsible for the lease should the site fail. Be very careful with these…

Service charge is the amount of money you'll be paying for the upkeep of the property and insurance is a way to protect yourself from potential losses. A landlord will almost certainly expect you take out insurance on the space (or will select one on your behalf).

Finally, let's talk about use, alteration, and repair conditions. Use conditions specify the type of business that can be conducted on the property, alteration conditions specify what changes can be made to the property, and repair conditions (also known as dilapidations) specify who is responsible for maintaining the property.

In conclusion, negotiating a lease can be a complex task, but with the right knowledge and preparation, you can ensure that the lease works in your favour. By understanding these terms and what they mean for your business, you can make informed decisions and find the perfect location for your business.

That said, we strongly advise you to have an agent and a solicitor help negotiate a deal on your behalf. If you take out a lease that is £50,000 a year for 10 years and get it wrong, that is a potential £500,000 mistake coming out of your pocket. Don’t skimp on professional help when it really matters. If you are considering putting an offer on a space, get in touch as we’d be more than happy to help.