When you rent a commercial property, there are several costs that need to be taken into account:
The landlord will normally request references to confirm you are able to pay your rent and rates liability. If you’re a start-up business, you may find it advantageous to have a guarantor for your rent and other liabilities under the lease. If this is not acceptable a rental guarantee may be required. This typically requires a cash deposit, which is usually deposited into a locked account. The landlord would be able to draw against this account if obligations by the tenant are not forefilled.
Rents are normally paid quarterly in advance on the following quarter days: March 25, June 24, September 29 and December 25. Any service charges or insurance rent will be usually billed at this time.
Rental and other payments are due whether you receive an invoice or not. It is your responsibility to make sure any payments are made on the due date to avoid additional charges that the landlord may be able to recover under the terms of the lease. These can be substantial!
The costs of using a surveyor to negotiate a lease on your behalf can be up to ten percent of the annual rent, plus disbursements and VAT.
Business rates are based on the rental value. These valuations are carried out by The Valuation Office Agency (VOA). These are revised on a periodic basis. The last valuation in England and Wales was carried out in April 2010 (Please refer to ‘Business Rates’ Section for detailed information). Scotland has its own system called Non-Domestic Rates, which is carried out by the Scottish Assessors (Valuation Department) and the poundage is set by Scottish Ministers. The last revision was carried out in April 2010.
Planning Permission and Use Classes for Commercial Tenants