At FindaLondonOffice, we appreciate that this may not be the most fascinating topic up for discussion when dealing with commercial property, but there are important legal facts you need to know when searching for London office space.
We have made these as easy to digest as possible:
What is a Covenant?
- This is the financial status of your company
- Like it or not, your potential landlord will be very interested in this
- Best presentation of financial accounts day 1 will help you negotiate the best commercial terms
- Most landlords still require a rental deposit unless you can demonstrate a powerful track record.
What is an Assignment?
- Instead of taking a brand new lease, you can take an assignment
- This is where somebody else started the lease and doesn’t want it anymore
- There may be many years to run on the lease yet, but the rent may be lower than current market rents
- You may benefit however from there being a substantial tenants fit out already done
- The existing tenant may want money for both of these by way of a cash premium
- Be careful of any dilapidations liability at the end of the lease you can inherit
- Having said this, most office space is acquired on brand new leases.
How does a lease work?
- These are complex agreements between landlord and tenant; they can often run up to 100 pages or more.
- They set out the tenants and the landlords rights and obligations
- Boring though this can be, you need to get it right
- Certain clauses may not appear very interesting on day 1, but key points can have a massive impact later on when you want to move out or contest a rent review.
- It is critical and beneficial to have a first rate solicitor acting for you on the lease
- It is normal for both parties to pay their own legal costs.
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