20 questions to ask your prospective Landlord.

Warning - look at the small print and make sure you know what you’re entering into! A good Landlord should have no difficulty giving you straight and clear answers to these questions.

  • Who is the Landlord?

    Ask 'who owns the building?' and check out their reputation. A good way to find this out is to talk to other Tenants in the building and ask whether they would recommend them.

  • Who will be managing the building?

    Find out whether the Landlord employs its own people to maintain and look after the building or whether the Landlord employs a managing agent to organise services and run the building. Ask around to find out if the Managing Agent is reputable.

  • Does the Landlord/ Managing Agent employ an on site building manager?

    This can help to maintain standards and may help to ensure that things get put right more quickly.

  • What quality of service can you expect?

    The style of after sales service you can expect to receive varies a lot. You need to know whether your Landlord will 'treat you like a valued customer' and how responsive they will be if something goes wrong. One clue is to find out whether the Landlord has published a 'customer service charter' which should state, not only their intent to provide high quality service, but also precisely what levels of service you can expect and what your redress will be if they fail.

  • What type of agreement is being offered?

    A good Landlord will give you a choice of contract lengths and terms to suit your business. Naturally, the price may vary depending, for example, on how much flexibility you want to walk away from the contract if your business needs change. Your rights and responsibilities will depend on whether you have a lease or licence. Also check when you'll be expected to pay the rent. This will usually be quarterly or monthly in advance. An increasing number of Landlords will require you to pay by direct debit.

  • How is the rent calculated?

    Find out whether the rent will be reviewed during the contract and if so how it will be calculated. Is the rental increase fixed now or negotiable at the time? If the rent is linked to the open market can the rent go down as well as up?

  • What services is the Landlord contractually obliged to give?

    Who is responsible for repairing the building/common parts and space? The Landlord might promise to do everything from repairing the roof to putting tropical flowers in reception but unless it's in the contract you can't enforce it. Be sure that the services critical to the continuity of your business are included.

  • Will I have to pay a service charge and how is it calculated?

    In many multi-occupied buildings the Landlord will require occupiers to pay a percentage of the running costs of the building. The service charge could be as much as 25% to 40% of the rent. If the rent does not include the cost of services, ask to see a copy of the Landlords service charge budget which should describe where the money's going. The total costs are usually shared in proportion to the amount of floor space you occupy. Ask if the Landlord expects to carry out any major repairs or works soon and who will pick up the bill - will it be covered by you, through the service charge or will the cost be swallowed by the Landlord?

  • What other expenses are payable?

    Your Landlord should be able to tell you what additional costs you will need to pay, for example, business rates and utilities charges. Make sure you factor these into your budget.

  • Will I have to guarantee payment?

    Take great care before making any commitment to provide a personal guarantee or make a rent deposit. A personal guarantee means that the person signing the guarantee is liable for all the obligations which are part of the lease contract. This could mean that even if your company fails the Landlord would have the right to pursue you for any unpaid rent or charges and even future rental commitments. It's commonplace for a Landlord to ask you to make a rental deposit of between 3 and 6 months rent depending on the length of the contract.

  • Who is responsible for buildings insurance?

    Usually the Landlord will accept the responsibility to insure the building against fire and other risks at your cost. This doesn't normally cover your own office possessions such as furniture, machinery, stock etc. You'll need to make your own arrangements for contents insurance as well as Employers Liability Insurance which is required under law.

  • Can you see a copy of the type of document you'll have to sign?

    Good Landlords will be pleased to let you have a copy of their standard terms or contract. Is the contract written in plain English so that it's easy to understand what your rights and responsibilities are and what will happen if either party doesn't stick to them? Although some Landlords have come a long way in simplifying property contracts you should take great care to read the small print. If in any doubt, it's probably well worth taking legal advice.

  • What opportunities are there to break the contract if you want to get out early?

    Unless the contract specifically includes a break option you won't have the opportunity to terminate it early. Some forward thinking Landlords provide occupiers with a rolling break right to leave at 3 or 6 months notice. This flexibility will come at a cost and is likely to be reflected in a higher rent.

  • Is there anything that you should know that will stop you using the premises for your business?

    Be sure that the Landlord is aware of how you intend to use the space and that it falls within both the permitted use of the lease as well as the planning use set by the Local Authority. If your business is noisy or could disrupt other occupiers it's better to make sure your Landlord is aware of this upfront.

  • Will you need to get the Landlord's permission to make changes to the space?

    Ask whether you need permission to carry out any alterations to suit your business. Share your plans with the Landlord to avoid any uncertainty. Beware - the Landlord might require you to put the property back into the condition it was in before and at your cost when you leave.

  • If you want to leave can you sublet or assign your lease? Can you share occupation with other businesses?

    You can only sublet, assign or share your space if this is permitted by the lease contract. It's essential to know what your options are. The precise wording of the lease contract is very important so be certain the lease gives you the flexibility you need

  • What is the penalty if you break the rules or pay the rent late?

    Do not enter any financial commitment that you may be unable to meet. You should ask what the penalty is if you pay your rent late or break any other rules stipulated in the lease.

  • Does the Landlord support the Code of Practice for Commercial Leases?

    This new voluntary Code contains twenty-three recommendations for Landlords and Tenants to follow when they negotiate new leases of business premises and deal with each other during the term of a lease. These recommendations reflect current 'best practice' for Landlords and Tenants and were developed in response to concern that Landlords were not dealing openly and fairly with small businesses. If your Landlord has never heard or the Code or is not willing to conform to it be prepared to look elsewhere!

  • Will you have automatic rights to extend or renew the lease contract when it comes to an end?

    In simple terms, if you have a business tenancy that falls within the Landlord and Tenant Act 1954 Part 2 you will have automatic right under the law to renew your lease. It's quite common for a Landlord to ask you to 'contract out' of the 1954 Act. If you agree to this, you and your Landlord are free to negotiate the terms of any renewal like any usual commercial contract. (Note: there is no Landlord and Tenant Act in Scotland.)

  • What will you be obliged to do when you vacate the space?

    Some lease contracts require you to leave the space exactly as you found it and possibly to remove things that you might consider improvements. Others require you to make a dilapidations payment to cover anything which is not 'fair wear and tear'.