COMMERCIAL PROPERTY

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It is important to seek expert advice when you are buying, selling or taking occupation of a commercial property. Ensuring you instruct a solicitor who has experience of handling commercial property transactions, will mean that you are more likely to be able to spot issues or matters that are out of the ordinary.

Nisha Bharadwa, Head of Commercial Property and Naresh Gill, Commercial Property Solicitor are all experienced commercial property solicitors, handling all types of commercial property matters. They understand that you and your business rely on the commercial property it occupies, whether the tenure is leasehold or freehold.

Nisha Bharadwa

Naresh Gill

The advice they give is clear and jargon free so that all parties involved are clear on the position. IT systems are used to provide a fast and systematic approach ensuring parties are regularly updated so there is no mis-communication and errors are minimised.

You may require assistance with the following types of commercial property work:

  • Sale of Commercial Property (freehold/leasehold)

  • Purchase of Commercial Property (freehold/leasehold)

  • Granting a lease over Commercial Property

  • Taking a Lease over Commercial Property

  • Taking an Assignment of Commercial Property

  • Securing a mortgage over Commercial Property

  • Portfolio restructuring

  • Property Portfolio Management

  • Commercial Property Ancillary documentation such as Licences to Alter, Change of Use, Deeds of Variations, etc

  • Deeds of Surrenders

We are more than happy to refer and recommend you to other property professionals such as agents and property surveyors.

Who Do You Help

Whether you are a sole trader, SME or a large corporate organisation we are able to assist you and your property’s needs. Contact our professional team of commercial property solicitors in Birmingham and see how we can help you with your business needs. We also help landlords and tenants manage their property portfolios, we draft and negotiate lease documentation and we provide general commercial property advice.

How Do You Charge?

Unlike traditional law firms, who still charge by the hour, we take the time to understand your commercial needs, and once we have established what help you require, we will offer you a fixed fee arrangement. Our fees are payable at the end of a matter completing, but on some occasions, we will reserve the right to interim bill you. This happens when your matter aborts, or when one party decides to delay completion. On some matters, where we need to apply for searches, we will request a small payment upfront, which is used to pay third party costs.

Landlord FAQ’s

Whether you are a landlord with a portfolio or you are becoming a landlord for the first time, we have extensive experience in acting for you as a landlord and negotiating the best terms for you and your business. These are some of the questions we are asked:

1. Can you buy a commercial property which is already occupied by a tenant?

The answer is, yes you can. If the property is occupied, this should be made clear from the start and will be detailed in the sales memorandum. It is important that you are fully aware of the status of the occupier and the terms of their occupation and what the position will be, when the lease comes to an end.

2. I have purchased a commercial property and I wish to rent it out. What terms should be included in the lease?

Usual practice is for a commercial property surveyor to market the property and agree the keys terms of the Lease.   We are happy to  discuss with you, your proposed letting and give you some initial advice, as to what should or should not be included in your lease, which will be bespoke to your circumstances.  Once agreement has been reached with a prospective tenant, we can produce a draft lease based on the agreed terms.

 

Some of the factors to consider when negotiating a lease are:

 

  • Depending on the financial standing of the prospective tenant –  you may want the prospective tenant to provide a rental deposit or a guarantor or both.  
  • Repair – you will want to make the tenant responsible for repair.  Often, a prospective tenant wishes to limit its repairing liability to a photographic schedule of condition.  You will need to consider whether this is something you would be agreeable to.  
  • The prospective tenant often wants to carry out alterations to the property, such as fit out works before taking occupation.  This is something you may wish to discuss at the outset, so that the parties are aware of the situation and a Licence for Alterations can be prepared and the prospective tenant can arrange plans and specifications.
  • If the lease is to be a Lease of Part – i.e. if you have a building or an estate with more than one letting unit you will need to consider how to manage the common parts and charge a service charge to cover the costs.
  • Do you want to grant the tenant a lease which is protected by the security of tenure provisions, pursuant to the Landlord and Tenant Act 1954?  
  • Do you have a Land Registry compliant Lease Plan
3. I am an existing Landlord and my tenant wishes to assign, underlet, charge or alter the property. What do I need to do?

In these circumstances, you will need to give your formal consent by way of a Licence to the Tenant, and your legal costs are usually recoverable from the Tenant

4. I am existing Landlord and the rent under the Lease needs to be reviewed. What should I do?

You should review the terms of the rent review clause in the Lease and we are happy to help you with this.  You should also instruct commercial property surveyors to help you work out the new rent, if the rent is to be reviewed on an open market value basis.

5. I am an existing Landlord and the term of the Lease is to expire soon. What should I do?

In this situation, some of things you will need to consider are:

 

  • whether the lease is protected by the security of tenure provisions pursuant to the Landlord and Tenant Act 1954.
  • whether you want the tenant to enter into a new lease.
  • if the tenant can continue to use the property without entering into a new lease i.e. allow the tenant to hold over (this is only possible, where the lease is protected by the security of tenure provisions of the Landlord and Tenant Act 1954).
  • whether you want to use the property for your own use?
  • whether you want to redevelop the property?
  • the dilapidations position, if the tenant is vacating.

Please contact Nisha Bharadwa or Naresh Gill to discuss any commercial property related queries that you have.

6. How do you charge? Please explain your fees and how they work. Do you offer paying arrangements?

Unlike traditional law firms, who still charge by the hour, we take the time to understand your commercial needs, and once we have established what help you require, we will offer you a fixed fee arrangement. Our fees are payable at the end of a matter completing, but on some occasions, we will reserve the right to interim bill you. This happens when your matter aborts, or when one party decides to delay completion. On some matters, where we need to apply for searches, we will request a small payment upfront, which is used to pay third party costs

7. Can I still sell and buy commercial premises at this time?

Yes.

8. Do I need professional advice when renting commercial properties?

Yes.

9. What happens to my commercial lease if my landlord sells the property?

The new freeholder will become your landlord.

Tenant FAQ’s

Whether you have been a tenant before or are becoming a tenant for the first time, we have extensive experience acting for tenants and negotiating the best terms for you and your business. These are some of the questions we are asked:

1. Why should I take legal advice when renting commercial property?

Entering into a lease is a major financial commitment for you and your business. It is important that you fully understand the terms, your obligations and the liabilities that you are taking on. 

By instructing a solicitor to review the lease on your behalf, they can highlight potential issues and suggest matters which could be negotiated to make the lease more tenant friendly and less onerous.  

When taking a lease, you need to consider: 

  •  the lease may need to be registered at the land registry.  Leases of 7 years or more need to be registered.  Leases less than 7 years can be noted against the Landlord’s title.  A land registry fee is payable.
  •  the obligation to pay stamp duty on leases.  This is calculated by the length of the term and the amount of rent payable.  

 A leaseis legally binding, so it is important to understand the commitments being made.

2. What will it cost me to seek legal advice?

Some matters are more complex than others, therefore the cost of our commercial property services is established on a case by case basis, but we understand that entering into a lease or growing your property portfolio is expensive, so our fees are fixed. We are happy to discuss your circumstances and provide a fixed fee quote. Call Nisha Bharadwa or Naresh Gill today on 0121 726 4999.

3. Can I make alterations to the property, and will I have to reinstate the property to its original condition when I leave or is this the landlord’s responsibility?

At the end of the term of the lease, it is usual practice that the property  is returned to the landlord in accordance with the provisions of the lease.  All repair and decorating obligations have to be complied with and any alterations made would need to be reinstated, unless it has been agreed with the landlord that they can stay in place.  Any damage to the property following the removal of alterations must be corrected. 

 

Before the end of the term of the lease it is good practice to discuss and agree any works that needs to be carried out with your landlord, so that you know exactly what is expected of you, before the end of the lease. The landlord may serve a schedule of dilapidations on you, which sets out the works they have identified needs to be undertaken and the cost of doing these works.  It is advisable to seek the advice of a dilapidations surveyor in this situation.

4. How can I negotiate the best deal for myself on a new lease?

Seek professional advice, either from a commercial property surveyor or a commercial property solicitor. There are tenant friendly provisions that may be incorporated into a lease, such as: 

  • An initial rent-free period 
  • A break clause 
  • A limited repair obligation 

The landlord is likely to have a surveyor or agent acting on their behalf.  

It often takes between 6 and 8 weeks to get a lease completed once terms have been agreed.

5. What are my rights as a tenant of commercial property?

Provided that you pay the rents and comply with your obligations you will have the right to carry on with your business, without interference from the landlord and any other rights agreed will be detailed in the lease.

6. What do I do if I want to change the use of the premises?

The lease will set out, what you can and cannot use the property for. If the use you wish to change to, is not included, you will need to seek consent from the landlord to change the use. In addition, to landlord’s consent you may need planning permission from the Local Authority to change the use.

7. My landlord is suggesting a significant increase in the rent at the next rent review, what can I do?

The lease will detail the rent review provisions. If you are concerned about the rent increase suggestion, you seek advice from a local commercial property surveyor.

8. I want to exit my lease?

Leases are binding contracts and you are committed to the property for the duration of the term, unless: 

  • a break clause was agreed, in which case you can exercise the break to end the lease early, by serving the break notice.
  • the lease permits  assignments, in which case you may market the property and if you find someone who wishes to take over the remainder of the term of the lease, you can ask the landlord for their consent to assign.  The landlord must not unreasonably withhold consent to a request to assign, but can refuse if the proposed assignee is genuinely not suitable.  Remember, that you will most likely be required to guarantee the assignee until the end of the term of the lease and you will be responsible for the landlord’s legal costs. 
  • The lease permits underletting, in which case  you will need to seek landlord’s consent to underletting.  In this situation, you remain responsible for the propertyand still have to pay the rent and deal with returning the property back to the landlord at the end of the term. 
  • You can negotiate a surrender with the landlord. The landlord is under no obligation to agree to this, but may be persuaded to do so, at a cost.
9. The landlord is refusing to renew the lease of my commercial property. What can I do?

If the lease is protected by the security of tenure pursuant to the Landlord and Tenant Act 1954, at the end of the term of the lease the tenant is  entitled to a new lease on substantially the same terms as the current lease, at market rent.   

However, the landlord can oppose you having a new lease, on one of the grounds below:

  • there are arrears of rent, or you have been persistently late in paying the rent or have breached the tenant obligations in the lease.
  • the landlord wishes to redevelop the property;
  • The landlord wishes to occupy the property for its own business 

You are also not entitled to a new lease, if the lease is not protected by the security of tenure pursuant to the Landlord and Tenant Act 1954, as the lease would have been excluded by a special statutory procedure, before the lease was completed.

10. My landlord is not carrying out their responsibilities. Can you help?

You will need to seek advice from a commercial litigator who can review the terms of the lease and liaise directly with the landlord’s solicitors regarding a breach of contract. 

11. My landlord is refusing to offer me a new commercial property lease. Can you help?

A commercial litigation solicitor will be better suited to assist you in this situation. If the landlord is agreeable to a new lease, we can help you negotiate and agree on the terms of the new lease.

12. I no longer want the business premises; can I get out of the lease?

Leases are binding contracts and you are committed to the premises for the duration of the term. However, you could consider one of the options below, but the suitability of this depends on the terms of your lease.

  • Exercising your break clause if this has been included in your lease.  
  • Assigning the lease, if your lease allows assignments. In this situation, you would market the premises and if you found someone who wishes to take over the rest of the term of the lease, you could ask the landlord for their consent to assign. The landlord must not unreasonably withhold consent to a request to assign but can refuse if the proposed assignee is genuinely not suitable. You will most likely be required to provide an authorised guarantee agreement to the landlord as part of the assignment process, which remains in place until the end of the term of the lease. 
  • Underletting the lease, if your lease allows underletting. In this situation, you need to seek the landlord’s consent to underlet. You remain responsible for the premises, paying rent and dealing with handing the premises back at the end of the term. 
  • Negotiating a surrender of the lease with the landlord. The landlord is under no obligation to agree to this but may be persuaded to do so at a cost.
13. Can I cancel a deal if I am no longer able to take on a commercial property?

If an agreement for lease or a lease has not been entered into, you can walk away.  

14. What should I look for in the terms contract when signing a lease agreement for business premises?

Always seek legal advice before signing a lease agreement. You need to be certain that you fully understand the terms and conditions of your lease.

15. My landlord is going to increase the rent for my upcoming rent review on my leasehold property. Can you help?

The rent review clause in the lease sets out the rent review mechanism. A local surveyor is better suited to advise on rent reviews. We can assist with drafting a rent review memorandum (should this be required).

Please contact Nisha Bharadwa or Naresh Gill to discuss any commercial property related queries that you have.