Failure to understand the liability of an FRI Lease. Be sure to understand the extent of your repairing obligation. Is it an FRI lease? Are you responsible for the upkeep of the structure? Have you had a survey to ascertain whether the structure is in good repair?
Failure to ensure flexibility for disposal. Make sure you can group company share. Make sure if the premises divides vertically or horizontally that you can sublet part too. Tenant break clause on 3 months notice no restrictions. The property market is uncertain.
Avoid security. Don’t give a personal guaratee unless you have to. Keep business and personal finances separate. Don’t tie up valuable cash in a rent deposit limiting cash-flow. Make sure that any security given can be released following 3 years’ of successful trading.
Make sure you have a right to renew. Many providers are finding they are having to accept too high rents and other terms because they have no legal rights to stay on at the end of the term.
Avoid a headline rent. Sneaky rent review clauses can lead to the creation of a rent on review of in excess of the market rent. This is a headline rent.
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