Acquiring premises for your business

Premises acquisition is not like going to the petrol station or
the supermarket.  The property investment classes - landlords - would like
us to think it is and the information paper looks like it might have been
written by someone with a background predominantly landlord focused.

What do I mean about petrol and supermarkets?  Well, when you go and buy
food or fuel, there is no negotiation.  That is the price and you buy or you
don't buy.  It is great for the vendor but not for the purchaser.  The only
exercise of choice is to go elsewhere.

With a premises acquisition it does not need to be that way.  Indeed it
should NOT be that way.

Premises acquisition is the agreement of a complicated contract with many,
many clauses each of which, and combined together, have significant impact
on the occupier.  If accepted as drawn, the terms (each one and the document
as a whole) will favour the landlord; and so the lease becomes a very large
stick that beats the tenant at every twist and turn.

The tenant that takes on the landlord and negotiates every clause is going
to improve their situation. the tenant is however at a significant
disadvantage to the landlord who does this kind of thing everyday and knows
so much more about it.  If the tenant gets advice on each clause [and of
course on the clauses that aren't there which could help them] then the
outcome can be even better.

However, timing is important.  If the business is committed to the space and
the landlord knows it, the negotiation is compromised.  Usually, by the time
terms reach the tenant's solicitor it is genuinely too late to change them.
The tenant is unwilling to risk losing the space, the landlord digs his toes
in and unsatisfactory clauses go in the lease.

The time to negotiate these terms is when the tenant is free to walk away
and before anything is [even tacitly] agreed.  That way they can agree the
best terms the landlord will accept in the knowledge that only when pushed
to his limit will he reject the tenant's terms.

The gains a tenant can achieve are beyond most of their understanding and
expectation; and it is not all about the rent!  Each monetary gain is also
multiplied by the number of years on the lease.

For more information or to discuss a specific issue,  please contact Culverwell Consulting at 01962 773882 or fill in our contact form.