Advice for first time commerical tenant

teatoast

Myself and my partner are starting up a business. Its very early days yet but we've seen a property to rent that would be absolutely perfect for what we have in mind.

I've never rented commercially before so is there any advice or differences I should keep in mind?

Also, with commercial rentals is the price typically negotiable or not?

Nuttzz

It's business everything is negotiable

On top of rent look at the council rates, depending on the building it could be another couple of grand a year

You then need to look at premises insurance as well.

See if you can get a break clause in the lease so that you can get out of it after X years in case things don't work out, which I hope you want need

teatoast

Hadn't thought of insurance and rates, I'll definitely have a look into that. Thanks.

neris

Probably repeating whats already been said. Rent is negotiable and make sure you negotiate a rent free period especially if the premises is in need of repair/upgrade & fit out. Say you want a year rent free to start off with and work down. Try negotiate a lease break clause in your favour for say year 5 or halfway through the lease so if things arent going to well you can bail out. Try get it so the landlord doest have the option from his side to break the lease and give you notice to get out. Also check do you need to get planning permission for change of use for the unit.

Check are rates up to date from previous tenants as you could be liable. Have your proper insurance in place to cover public liability, employers liability and stock damage. While the landlord should have the building insured they may bill you for the insurance cost of the building/premises. Find out who the landlord is.

Is it a big landlord/investor who doesnt give a toss about you and only wants the money and will chase you if things go bad and you close down after you asked for rent reductions etc or is it a small guy with a few properties as an investment who needs you to pay his mortgage and will work closely with you if things start going bad.

Offer to pay yearly rents on a ramping scale. Start off with few months rent free and low rent in year 1 and work your way up with increasing payments over time as business should pick up with time you dont want to pay big rent in year 2 and struggle and the get to year 5 at that same rent or not even make it to year 5 due to rent draining your cash as your building the business

antoinolachtnai

Get a good solicitor to deal with the legal part. If you are uncertain about the commercial aspects, get an estate agent to represent you. If there are planning issues, you will need advice on that too.

It's a lot of advice to get , but if you don't know much about commercial property, you might need it.

The last commercial property I rented in Ireland it was a 5 year lease originally, and I negotiated so that it was a 1 year lease which was extendable but I could also get out of it at any time by providing 2 months notice. Given theres a big chance a startup can fail, it good to be able to get our of your lease if necessary.

Cryos

I would generally give this advice:

- Get a good solicitor, we have had a few landlords who seemed to of purchased a generic contract online somewhere which looked all legally etc to myself and another director but was complete hogwash according to our solicitor.

- Beware of Building Maintenance Clauses, have your solicitor really talk to you about this one and what your on the hook for.

- Service Charges: A bug bear of mine and an issue we currently have with a landlord, either a yearly statement of work with financials as spread between all clients in the business park (if applicable) or an agreed list of work in the contract to be carried out by x frequency.

- Insurance as already been stated.

I used to say Rates but as of mid way through your not culpable for bad rates for the previous tenant (for the previous 2 years) under the 1838 act anymore as far as i know?