Office Leasing Costs
Find out what costs you will be liable for when agreeing your Office Lease.
It's important you are made aware of what costs you (as a tenant) will be liable for before signing your Office Lease, so you can account for these costs in your Moving Office Budget and add them to your annual operational costs as a business going forward. Whilst no two office leases are ever identical, there are almost certainly office lease clauses relating to the rent and certain costs that are common in almost every office lease. These might include:
Rent
The amount of rent you pay on a property will be stipulated in the office lease, and the cost of which, will vary enormously depending on location, term, condition of the premises and also driven by the commercial office market and the wider economic environment.
If you would like to get an idea of what local office rents are being achieved, talk to your local Property Consultant who has detailed knowledge of the area and will be well acqainted with what office rents have been achieved recently.
Rent Payment Conditions
Office rents are usually paid quarterly in advance and there is often a late penality; so ensure you diarise your rental payments or set up direct debit with your bank.
Rent Reviews
Rents are adjusted periodically depending on market conditions - usually every 3-5 years. Beware of certain review clauses which talk about "upwards only" rent reviews, as it means your rent will only increase regardless of market conditions.
Service Charges
The tenant will usually be responsible for service charges on the property, but make sure you are clear as to your individual responsibilities; particularly if you are sharing premises with other tenants. Charges are likely to be imposed for cleaning, lighting, security etc. so ensure you have a breakdown of such charges and how they have increased/decreased over the last, say 5 years.
Business Rates
The tenant is responsible for paying business rates. These are set by the Valuation Office Agency according to market rents and reviewed universally every 5 years.
Understanding what office lease costs you are liable for need to be clarified with a professional Property Solicitor. This will not only make sure you are able to financially afford the ongoing costs, but it also gives you better negotiating power with your Landlord to secure the most advantageous office lease deal for your business.
