These are Key Questions from a Landlord with a Commercial Lease or Tenancy
What are the key essentials to taking a lease or tenancy with the above QA’s?
1. Read the Common Sense Guide to Buying a Pub, so that you get an initial feel about the Business.
2. Always have a Survey or a Schedule of Condition agreed with the Landlord or his Agent.
Everyone buying a commercial property, especially a lease should have a Schedule of Condition, to validate the state of condition PRIOR to the handover date. If there are outstanding wants of repair or decoration, then either the Landlord or the previous Lessee is responsible, if it is left until a later date, no action can be taken without documentary proof agreed with the Landlord or his Agent.
3. If the Landlords Agent or BDM (Business Development Manager) says that they always have a Survey or a Schedule of Condition at every change of Lessee or Tenant, ensure that it is confirmed and carried out, in writing Prior to changeover, you need an independent confirmation of all faults etc. with photographs, do not sign the lease until you have a copy of the Survey and agree it.
Most Landlords do not have a Survey done, any that do, the Surveyor is working for the Landlord not you. A couple of BDM’s left unwary lessees with massive dilapidation bills, because there was no survey by the Landlord.
4. We have a selection of Takeover Day Checklists for most business types of things that need action or being aware of before you instruct a Commercial Lawyer or start spending serious money.
5. Unfortunately the majority of people you need to use before buying a business tend to provide information about their subject, rather than linking information across the board. Consequently there is frequently a serious gap about critical responsibilities, especially in Commercial Leases, which are favoured towards the Landlords Interests.
6. On Commercial Leases with domestic accommodation, there is no protection for the occupants or families, the eviction time is as defined in the lease, which can be as little as one week.
7. Commercial Business Agents, don’t lie, they are very economical with the truth, their duty is to the vendor selling the business, regardless of the nature of the business.
8. The Pub Code Adjudicator (PCA), who is supposedly responsible for the actions of the Major Pub Co’s within the New Legislation, has in fact failed miserably in most peoples opinion. The Major Pub Co’s with more than 500 pubs, have collectively the most expensive top lawyers acting for them to beat the New Legislation. In addition the PCA, as part of his brief, to ensure that every person considering taking a Major Pub Co Lease is fully informed of their long and short term responsibilities, which he does not, all the failed lessees that come to us have no idea who the PCA is and his responsibilities, there is a lot more.
The Pub and Licensed Sector
- Major Pub Co’s, the majority are property companies that do not brew beer, a very few do or have been bought by the likes Heineken. They have well over 500 pubs/bars/restaurants per company, but are restricted to a maximum of 2000, they exploit the letter of the Commercial Lease law to the extreme and in our opinion should be avoided for any film. The New Legislation was brought in as a result of four Government Inquiries into their questionable activities, most were and are technically legal. (2800 failures with one major company, the majority described as Retailer Failure before the New Legislation was brought in.
- Family Brewers, these are long established Family Brewers, they offer short term tenancies, that do not have the draconian responsibilities of Commercial Leases. They are in business to sell their products, with normally good training, guidance and a good starting point in the Leisure Industry.
- Private un Tied Leases, these are usually in major city centres, large companies or major brewers snap them up.
- Freehouses/Bistros/Restaurants, many of these are either freehold or will have an un Tied Commercial Lease and represent a better direction for a film.
- Cafe’s/Coffee Shops/Sandwich Bars, these are a good starting point, they are low cost products with high profitability and less inherited staff.
FAQ’s for people thinking about buying any small Business