Renting premises suits many businesses and there are a wide range of commercial premises available.
The advantages of renting depend on exactly what you have agreed with the landlord. With a typical lease, you agree to occupy the premises for a fixed number of years and pay an agreed rent, though the lease may allow the rent to be reviewed periodically. Up front costs for leasing premises are often relatively low, though you may pay a premium to purchase the lease. Sometimes you may also have to provide a refundable deposit. You should also take into account legal and other professional fees.
However, there are disadvantages. You may have significant maintenance and repair obligations. The lease may include other obligations and restrictions. You may also have difficulties if your needs change and you want to move before the lease ends.
A new revised code of practice has been launched to help promote fairness in commercial leases. Although the code is voluntary, it does contain useful advice that can help you negotiate favourable lease terms if your landlord does not offer a code-compliant lease.
Some properties are available on flexible, short-term licence agreements. A typical licence agreement allows you to rent the premises for minimal up front costs - typically a refundable deposit equal to one or two months' rent. Although you must keep the premises in good order, you are not responsible for structural repairs.
If you do decide to rent premises, it's important to check exactly what the agreement says. If you are in any doubt, you should take legal advice. You should also be aware that you still have general legal responsibilities, such as looking after the health and safety of employees and visitors to your premises, though these responsibilities may be shared with the landlord.
Buying your business premises