Tenants Guide

Finding a property

What other points do I need to consider?

If you are starting your first business, there are likely to be many issues you will need to consider. These web pages are not meant as a general guide for this purpose, but there are agencies that can help you. We particularly recommend that you contact Business Link for London for advice and support. (Their details are on the Useful names and addresses page)

Business Link is a 'one stop' advice centre for small and medium-sized businesses. It will offer a range of help including preparing business plans, and giving advice on tax and financial planning and so on.

For business leases, the rent cannot fall during the course of the lease. However, we will consider offers for new leases that allow the rent to go up or down to open-market levels at rent review time. (See section 3a 'Will my rent increase during the course of the lease?').

You must pay an increased rent during the first 5 years of the term if you need this increased flexibility. You should negotiate this with our managing agents when you first consider taking a lease from us.

As a business tenant, you should remember that you would have to pay a range of costs as well as your day-to-day business spending. These costs are likely to include the following.

Rent

You will have to pay us rent at regular intervals.

National Non-Domestic Rate (business rates)

As with council tax, business rates are due in April of each year although you can pay in 10 monthly payments. Our Corporate Director of Resources can confirm the current rates. This figure usually increases each year.

Insurance

There are various types of insurance - some for the property and some for the business itself.

Service charges

These apply particularly to office and industrial properties but they can apply to shops in some cases. If these do apply, your lease will set out the services that we will provide. (These may include repairs, cleaning, security and so on). These costs are then shared between the tenants who benefit from the services.

Legal and surveyor's fees

These fees are not charged yearly - they will be linked to specific events. You will usually have to cover our reasonable legal costs for preparing your lease, and any deeds or licences you want during the course of your tenancy.

When you apply for a lease, you should ask our agents to confirm how much the legal and surveyor's costs are likely to be. You will also be responsible for covering our legal costs if we have to take legal action because you break the terms of your lease.

Stamp Duty Land Tax

The government has altered the rules about Stamp Duty Land Tax. The new tenant must now pay the stamp duty.

The amount of tax depends on the value and length of the lease. There is no stamp duty to pay for lower value leases, and then the stamp duty gets steadily higher for more valuable leases.

The rules for working out the tax and deciding whether your particular lease is liable to stamp duty may not be straightforward, and we recommend that you get professional advice on this matter.

Penalties - The Inland Revenue can set penalties and charge interest if you are late telling them about a lease that is liable to stamp duty. So it is important that you or your advisers fill in and send the necessary returns to the Inland Revenue as soon as the lease completes.

Claiming relief from stamp duty - At the moment, a lot of the borough qualifies for 'Disadvantaged Area Relief'. This may mean that you are entitled to claim 100% relief from stamp duty. You are responsible for claiming the relief.

The Inland Revenue website includes a postcode search which will allow you to check whether the property you are interested in qualifies for relief. (Please see the Useful names and addresses page for the website address).

Because of the changes to the tax rules, it is important that you check whether you will have to pay stamp duty before you complete the lease. There are more details and up-to-date information on the Inland Revenue's website.

Registering your lease with the Land Registry

The government has recently changed the rules for registering leases with the Land Registry.

Under the Land Registration Act 2002, all leases that are longer than 7 years, and all assignments of leases with more than 7 years left to run, must be registered. (Under the old rules, only leases that were longer than 21 years or that had more than 21 years left had to be registered).

If you need to register your lease under the new rules, it is important that you do this, as you may be breaking the law if you don't. Also, if you don't register your lease, you may find it difficult if you need to prove that you are the tenant.

There is more information about the changes on the Land Registry's website.

Your solicitor should be able to deal with registering your lease and find out about any stamp duty you may be responsible for.