Pre-lease assessments of commercial properties

With the market for commercial properties currently buoyant, business owners can be so eager to snap up a property for let that they overlook issues that may come back to bite them later – in the pocket!

Often prospective tenants seek guidance from a solicitor before signing a lease, but don’t arrange for the building itself to be surveyed. It is important to take professional advice on both fronts.

Important questions that a surveyor will consider as part of a Pre-Lease Assessment are:

• Will the tenant be inheriting significant dilapidations liabilities? You may be able to eliminate potential tenant’s responsibilities as part of the Lease drafting if your solicitor works closely with your surveyor.
• Are any significant repairs needed, which a tenant should be aware of before taking occupancy? With this knowledge, the landlord might be persuaded to carry out repair works or agree certain incentives (e.g. rent free periods).
• Are the service installations adequate?
• Is there asbestos in the building?
• Is the rental level appropriate?
• Has the building been measured accurately? Is it as big as the letting particulars state? You don’t want to pay rent/rates on square footage that doesn’t exist!

This document should be referenced in the Lease, to ensure the Tenant is not responsible for returning the building in a better condition at the end of the term. Pre-lease Assessments and Schedules of Condition represent great long term value to commercial clients - “forewarned is forearmed”!