Thinking about how you offer your commercial property to the market is really important if you want to maximise rental value. With some careful consideration, you can understand what tenants require – and other things that they desire.

However, sometimes it can be difficult to know where to start. So, we have compiled a Landlord Checklist of what you should consider:

Getting startedGetting started as a landlord

Seeking the advice of a qualified commercial surveyor in the early stages is always highly recommended. The advice they can give you will be invaluable – telling you clearly what the market wants. After all, they deal with new lettings and current requirements on a day-to-day basis so are always best-informed to advise you.

If you have a tenant moving out the property, then you should consider remarketing as soon as possible to minimise a ‘void period’.

You should also consider what works are required to bring the property to a suitable standard. Your outgoing tenant may be responsible for some of these works – which will form part of the ‘dilapidations’ works/ claim.

 

Enhancing the physical condition of your commercial propertyEnhancing your property

The condition of the property is a key concern to the tenant because:

  • They want to ensure the property does not disrupt business
  • A tenant is likely to be responsible for the maintenance and repair of the property – therefore they want to minimise potential costs

Therefore, as a Landlord, you should:

  • Make sure both the external and internal aspects of the property are in good repair
  • Decorate to a good standard – as this will add value and tenants are likely to be attracted to the fact it’s ready to move into (and they can put their own stamp on the premises)

When refurbishing your property, you should consider:

  • Are you offering what the majority of the market wants?
  • While the property is unoccupied, would now be a good time to remove any asbestos-containing materials? (This would make the property more economical and user-friendly)
  • Can you improve efficiency in the building by considering you utilities – such as lighting, type of heating etc.?

 

Consider what type of accommodation your commercial property is – as this will affect how you present it.What type of property are you renting?

For retail units ensure:

  • Clean & tidy sales areas with good LED lighting
  • Clean floors
  • No stained ceiling tiles
  • No clutter
  • Heaters, radiators or air-con units are clean and in working order

 

For offices ensure:

  • Clean & light spaces
  • A good quality flooring covering – it’s essential for office space
  • Well-decorated walls
  • New ceiling tiles
  • Good-quality lighting
  • Removal of some or all of older office partitions – this can emphasise the size and use of the space
  • Parking – if possible – you want free spaces for visitors, at least
  • Furnishing – at least as an example so a potential tenant can envisage how the space could work

 

For industrial and warehouses ensure:

  • Well-presented external brick or cladding
  • Roller shutters in working order
  • Clean skylights to improve the appearance and levels of natural light
  • Clean & painted flooring (depending on use)
  • Gas heaters in working order
  • Satisfactory utility certificates

Overall you should have a clear site or compounds – preferably with secure perimeter fencing and gates.

 

Marketing your commercial propertyMarketing your first property as a landlord

Firstly, you should contact a commercial agent – as they can advise you on how to market your property, advise on market rents and what information is needed.

In order to market your property effectively, you should consider:

  • Who is your target audience? Who is active in the market?
  • What is the market compared to similar premises? And is there a shift in the market rents (supply & demand)?
  • Whether the property has:
    • An energy performance certificate? Does the rating meet the minimum standard to legally let the promise?
    • Satisfactory electric, gas and air-conditioning (if applicable) certificates?
    • Other health & safety reports in place – such as legionella & asbestos reports?

When your commercial property is ready for the market, an agent will have a number of marketing tools to suit your property.

For example:

  • Key features & benefits of the property online & offline in a brochure
  • Good quality photographs – either from the agent or professional photos may be recommended
  • Aerial photographs can best show the property, land and the surroundings
  • 360-degree photographs are a great visual aid
  • Walkthrough videos can also really help the buyer journey
  • Signage remains a key marketing tool – and there are a few different options:
    • A large ‘V’ Board attached to the property or bespoke sign.
    • A banner can be used for various sizes, usually with a high level of passing traffic
    • Window vinyls for roadside or in town, particularly useful at ground floor level in towns or roadside
  • Website marketing such as Zoopla – which can attract a high level of traffic
  • Bespoke & targeted websites within Industrial/Office/Retail Agency Societies
  • Use of social media platforms

Help with leasing your commercial property

When it comes to preparing your commercial property for market, it’s best to get professional advice early on – even better before the property becomes empty. This means your property will be well prepared for the market – and you could achieve the best results reflective in your profit margin.

At Mounseys, we may also be aware of requirements that already suit your property – so your property may not even have to go to market before it gets a tenant.

Get in touch to find out how our professional property consultancy can help you navigate the letting of your commercial property – from liaising with solicitors to marketing your property to the right people.

Are you renting out your commercial property to someone you know? A good friend, a trusted business colleague – or even a family member? When solid personal relationships are in place it’s easy to think that lease formalities don’t need to apply, with many opting for a more casual approach – an informal letting.

Unfortunately, this often leads to trouble. And, at times it can be disastrous – even resulting in financial ruin.

However, putting a lease in place safeguards both yourself, as a commercial landlord, and your tenant. As a legal document, it is the backbone to the letting – and enforceable by law.

Without one, you risk exposing yourself to the following grey areas…

1.  What happens with the rent?

INFORMAL COMMERCIAL LETTINGS At the end of the day, your property should generate a rental return. And you need to regularly collect that money from your tenant.

Having a formal lease in place defines the agreed rental amount; how often the rent will be collected; how it will be collected; and when it will be collected (i.e. every 28 days, monthly or quarterly etc.).

When renting to close relatives or friends it can be tempting to trust a verbal agreement – however, this may lead to confusion on both sides. Especially so, as a formal lease will define exactly what the rent covers – or equally important what it doesn’t cover! Business rates, building insurance and service charges etc. are all costs which should be outlined.

A good lease provides clarity to both parties and clearly identifies the responsibilities of both landlord and tenant. Well-drafted leases help to avoid needless arguments and disagreements.

Awkward rent conversations

Furthermore, formal lettings agree on processes for increasing rent and outline how to deal with awkward situations should they come up – like if your tenant doesn’t pay their rent.

The reality is that even those personally close to you aren’t immune to falling behind with rent – so you need adequate protection should this happen.

Tenant background check

When we negotiate or agree lease terms, we always advise our clients to have a professional background check or a company check on their tenant-to-be. Even if they feel they know them inside-out.

We are responsible to obtain details of any party making an offer. However, we often also undertake a credit check on the tenant to ensure that they’re financially able to meet the costs of the rent, service charge etc.

Remember – not everyone is completely transparent about their financial situation.

2.  Who carries out repairs?

INFORMAL COMMERCIAL LETTINGS Without a formal lease in place, there are lots of unanswered questions – some that can cause a lot more trouble than necessary.

Simple things like, “who should repair a leaking tap?” can lead to confusion and bad feelings between two parties – as the tenant may feel its the landlord’s responsibility. Whereas the landlord may feel vice versa.

Not only can this lead to a breakdown in a landlord-tenant relationship – but it can lead to repairs being ignored – and your property falling into disrepair.

Having a formal lease in place outlines responsibilities clearly.

3.  What is the building’s use?

INFORMAL COMMERCIAL LETTINGS It’s a common misconception that you can use a commercial building for whatever you like.

For example, if your tenant is a beautician and then they decide to use your property as an office (rather than a beauty salon) then you could be breaching planning permission.

Having a formal lease agreement will outline specifically what the building’s use is.

Additionally, it’ll confirm seemingly unimportant things like turning up at the property when you require. Or, if you have to seek permission as a landlord. Again – another grey area easily overlooked – that can grow into bigger problems.

4.  Who makes the building compliant for the law?

INFORMAL COMMERCIAL LETTINGS Informal lease agreements usually fail to outline key regulations – such as whether it is the landlord or tenant who is responsible for ensuring that the building complies with legal requirements.

Having a formal agreement in place outlines these duties – even if you feel that you could verbally agree on them with a personal relation occupying your commercial property. Remember they may not always be on the same page as you!

5.  What happens at the end of the lease?

INFORMAL COMMERCIAL LETTINGS If you’ve informally let your commercial property – have you even agreed on an end of lease date with your tenant?

Even if you’ve casually agreed to review after one year, your tenant (however close they are to you) may not feel the same as you after this time – especially if you’ve done your homework and the market demands you raise your rent.

This becomes even more complicated when the building needs to be repaired at the end of the lease (typically referred to as dilapidations) – again, are you going to expect your tenant to cover the costs? If it’s an informal agreement, they may have assumed you were responsible for repairs and decoration costs.

A formal lease may seem extreme on paper – especially if you’re renting to your children for example – but it will clearly outline the appropriate terms to agree at the end of the lease.

Why formal lease agreements are so important in commercial property

You may feel you know your stuff when it comes to commercial property – and also, you can easily explain this to your tenant.

However, the truth is that there are a lot of grey areas – sometimes due to presumptions born from residential lettings – which are very different.

A well-drafted lease will clearly and concisely outline both landlord & tenant responsibilities such as the rent amount & schedule, repairing responsibilities and when & how the lease comes to an end.

Help with leasing your commercial property

At Mounseys, our property consultants are experts in commercial property and commercial leases – and can help you make things crystal clear for you, as a landlord, and your tenant.

The result? More financial security with your commercial property – but also it can actually help preserve your relationships – meaning a happier and more successful letting and much, much easier to manage.

Formal lease agreements

Formalising your letting agreement is a very important cog in the commercial property lease wheel.

Speak to us to see how we can help you negotiate a lease agreement – and the other services we provide to help you get the best from your commercial property.

To find out more get in touch

The benefits of excellent quality advice, whether to a landlord or tenant, is not to be underestimated. This is where a Surveyors specialised knowledge and guidance can be critical and covers a whole range of area, the most common being:

  • Lease renewals
  • Rent reviews
  • Quality property management
  • Serving of notices
  • Schedule of condition & dilapidations

Whether there is a clause that you don’t understand or you want to make sure that your property is adequately protected within the agreement, it’s essential to do your research. A RICS regulated Surveyor will be able to provide professional advice on any issues that arise from both parties, putting everyone in the position to participate in a fair tenancy agreement negotiation.

tenant negotiations that are best for both parties

From our experience, when a landlord and tenant negotiation is handled appropriately, it yields long-term stable leases with financial security for both parties.

In many cases the other side will employ a surveyor to act on their behalf. Therefore, you should seek professional advice to counter. The best outcome in almost all cases are achieved where professional advice is sought.

Lease renewals and rent reviewsLease Renewals & Rent Reviews

Employing a surveyor for lease renewals or rent reviews, whether you’re a Landlord or Tenant, can ensure you:

  • Don’t pay/receive over/under the market rent
  • Abide by the requirements of the Lease
  • Serve notices within timescales required by the Lease (if time is of the essence).

Landlord and tenant negotiations

What should you do?

  1. We recommend you use the services of a RICS regulated Surveyor or firm of Surveyors. The word ‘surveyor’ can be loosely used so it is recommended they are a qualified surveyor. The RICS website, allows you to check the individual or company https://www.rics.org/uk/find-a-member/

 

  1. Contact Mounsey Chartered Surveyors for a free initial consultation where we will discuss your requirement or how we can help.

If you are intending to purchase or lease premises then it is beneficial to employ a commercial surveyor at the earliest stage. As professional regulated bodies, RICS Surveyors are best placed to provide advice in all areas of commercial property matters.

Richard Mounsey Commercial Surveyor

The surveyor will know the commercial market and be able to offer you options to suit your requirement or source options on your behalf confidentially. In the current market there are also a number of ‘off-market’ deals taking place because demand is outweighing supply, therefore unless you have made your requirement known you may miss an opportunity.

If you have already identified premises the surveyor can offer guidance on the market value or rent for a property. This is not to say that this is what will be agreed between the parties but you are in the knowledge of what the property value/rent should be if independently valued. In a market where competition is high you may need professional advice to be successful.

Making the most of your business property

The surveyor will know the commercial market and be able to offer you options to suit your needs

On the other side, if you are offering your property either for sale or to let, a commercial surveyor has the knowledge to give qualified recommendations as well as knowing:

  • Market price/rents.
  • The activity in the market.
  • Advise on the best method of sale – open market/formal or informal tender/auction.
  • Active requirements which suit the premises.

Qualified recommendations

A good surveyor who knows the market can assist clients throughout the whole process. Ensuring that they obtain the best result for their situation.

What should you do

  1. We recommend you use the services of a RICS regulated Surveyor or firm of Surveyors. The word ‘surveyor’ can be loosely used so it is recommended they are a qualified surveyor. The RICS website, allows you to check the individual or company https://www.rics.org/uk/find-a-member/
  2. Contact Mounsey Surveyors for a free initial consultation where we will discuss your requirement or how we can help. 01782 202294

Commercial Energy Performance Certificates

Just how important are Energy Performance Certificate (EPC) ratings in commercial property? Very important, if you want to lawfully let commercial premises and avoid complications should you require finance to purchase.

Who’s affected?

Owner’s, occupiers, purchaser’s – EPC’s can have an impact on you.

Since 1st April 2018 it has been a legal requirement for commercial properties to hold an EPC. And commercial properties now require a minimum rating of ‘E’ before the premises can be leased. This also affects Lease renewals. So if you’re a seller or a purchaser, EPCs can affect the value and lending process. And with two sets of regulations in force, it is critical to ensure you are complying.

Consequences

If you don’t already hold an EPC or the rating is ‘F’ or ‘G’ you run the risk of future fines of up to £150,000. Acting now could save money, vacancy rates and increase market appeal. The cost of assessing a property’s efficiency can be a small proportion of the cost.

All commercial properties must hold an EPC rating of 'E'

EPC Overview

Commercial EPCs initially began from April 2008 under Energy Performance of Buildings Regs 2007 and from April 2018 the additional Energy Efficiency Regs 2015 came into force and both remain valid. More information on this legislation can be found here.

Until April last year the attention to a properties EPC rating was not high on the agenda and as a commercial agent I can say that the number of times I was asked about the rating was infrequent. The earlier part of last year saw the question raised more frequently but as the new standard came into force it was evident the importance was still unclear to a large proportion of Landlords/sellers.

The later regulation captures all commercial properties including:

  • All new lettings must hold an EPC rating of E or above
  • All lease renewals must hold an EPC rating of E or above
  • Sales of commercial buildings

Most properties must have an EPC

Most commercial properties being let or sold must have an EPC. The EPC must be in place at the time the property is offered but a commercial property can be sold even if the rating is below an ‘E’, whether vacant or with an existing lease in place. In this instance a low value EPC can have an affect on the marketability, the value a purchaser puts on the property (taking into consideration works required to improve the rating) and lenders are now focusing on EPC’s for lending purposes.

It is now illegal to let a commercial property without an EPC in place and with a minimum ‘E’ rating.

What doesn’t require an EPC?

There are some exceptions to the EPC regulations such as if it is a listed building. But a qualified assessor will advise where factors such as property size and use result in a property being exempt.

Where improving the EPC rating is not cost-effective it is best to apply for an exemption.

Forthcoming Regulations

From April 2023 all commercial properties, including those with existing Leases will have to hold a minimum EPC rating of ‘E’ to be compliant. In practice, all landlords should take professional advice on their property portfolio in advance of these new regulations. Mounsey Surveyors can put you in contact with a qualified commercial energy assessor and assist for further advice or discuss the implications with you further.

What should you do?

Contact Mounsey Surveyors for a free initial consultation. Where we will be happy to offer examples of how improved efficiency ratings can benefit you and your Tenants. You may find there are cost effective solutions to comply, assist with lease renewals as well as attracting new Tenants. For Seller’s, a compliant rating will improve the marketability of your property and satisfy a buyer’s lenders requirement.

 

 

A new drive is underway to identify a suitable occupier for an historic city centre church following the opening of a major new food and entertainment complex close by.

The Grade II Listed St. John the Evangelist Church in Hanley has stood empty since the late 1980s before being carefully restored a few years ago.

Now marketing agents Mounsey Surveyors believes the time is right for a renaissance of the church which dates back to around 1787.

“The development of the Hive at the Intu Potteries Centre has added significantly to the footfall in the area and will be a significant driver for more development on the northern side of the city centre,” said Tom Johnson, Chartered Surveyor at Mounsey Surveyors.

“Whilst we are receiving ongoing interest in the re-use of St. John’s Church, we are undertaking a thorough marketing campaign to identify a suitable occupier on either a freehold or leasehold basis. Based on our discussions with local planning officers, they are keen to support a full range of uses given the building’s prominent city centre location.”

Owners, Church Converts LLP, have carried-out extensive work to ensure St. John’s remains weatherproof and in sound internal condition. The building comprises 8,410 sq ft of internal space that is located on a secure site area benefitting from dedicated car parking.

St John’s was among the first building constructed using cast iron and is therefore of architectural significance.

Tom comments, “A Restaurant and café use has always been the most likely alternative use for the building but I believe it would prove equally suitable for a range of other planning uses including leisure, business, retail and residential.”

Since purchasing the building amongst a portfolio of assets from the Church of England, Church Converts LLP has invested substantially in the building to repair it, bring out the best of the historic features, and present it as a beautiful space for future tenants to exploit.

For further information, please contact Mounsey Surveyors on 01782 202294 or visit the website, www.mounseysurveyors.co.uk.

 

An experienced café owner is set to breathe new life into a disused tea room at a Staffordshire Moorlands beauty spot.

Mounsey Chartered Surveyors has successfully completed negotiations to let the picturesque Froghall Wharf tea rooms on behalf of the Canal and River Trust.

It has been taken on by Emma Atkinson, of nearby Moneystone, who already operates tea rooms in two Derbyshire beauty spots.

The new Froghall Wharf tea rooms, to be named Hetty’s after Emma’s 90-year-old Grandma, is close to Emma’s heart.

“When the tea rooms were open previously, I called in regularly with my family for an ice cream,” said Emma. “Once I knew it was available, I jumped at the chance of taking it on. I’m now planning to let one of my businesses go so that I can concentrate more effort on Froghall Wharf.”

Extensive changes are planned involving a complete modernisation of the tea rooms and the creation of a holiday let on the upper floor.

Tom Johnson of Festival Park based Mounsey Chartered Surveyors, commented: “We are pleased to have successfully let this unique asset on behalf of the Canal and River Trust.

“It is an attractive building which has attracted strong enquiry levels throughout the marketing period and this was reflected in the proposals that we received. It was equally important, however, to identify an experienced operator with a proven background in the food and drink sector who would re-establish the venue as a place to visit whilst complementing its waterside setting. Emma stood out as the outstanding person to meet this criteria.”

 

A major warehouse with the space to create up to 300 jobs has been released onto the market in Stoke-on-Trent.

Commercial property experts, Mounsey Chartered Surveyors, have been appointed to market a 103,000 sq. ft. industrial/warehouse facility on Oldfields Business Park in Fenton.

“Initial marketing has gone well and there has been strong early interest,” said company director Richard Mounsey.

“This is a significant regional warehouse and is likely to be among the largest existing buildings to come to the market in North Staffordshire this year.”

Mounsey Surveyors are advising the freeholder of building, which was formerly occupied by air handling equipment manufacturers Moducel.

Richard added: “The building is of modern specification benefitting from integral two storey office accommodation, a 6 meter warehouse eaves height and full site circulation. It benefits from its excellent location with easy access to the A50 and A500 dual carriageways, providing good links to the M6 Motorway at Junctions 15 and 16, as well as the M1 Motorway and the East Midlands.”

The building is available on a new lease on terms to be agreed.