The majority of leases in the UK are Full Repairing and Insuring ("FR&I"), that means the tenant is responsible for everything you can think of and must return the property in a good state of repair at the end of the lease. Towards the end of the term the landlord will normally employ a surveyor to prepare a schedule of dilapidations and serve it on the tenant.
The tenant may well carry out this work but many larger companies prefer to reach a financial settlement with the landlord. Simples.
In other countries eg the USA, the convention may be totally different - the landlord may pay for absolutely everything. I guess this is a mixture of culture, history and market forces.
Traditionally, this is drawn up by a lawyer and runs to about 50 pages of legalese and may well take several months to put in place - yes, really. The lawyers can justify this (what did you expect) but after 40 years of dealing with commercial tenants I can tell you that in all that time I have NEVER had a case where the tenant relies on some subtle wording to wriggle out of his obligations. Never.
If you are dealing with household name companies then they will expect a long lease and if you wish to borrow against the property your bank MAY expect a proper long lease.
But if you are dealing with local companies, they don't pay or carry out their obligations for one of two extremely simple reasons - can't or won't. Usually can't. Despite what the Socialists imagine ("vast profits"), business is extremely competitive and it is not easy to make money and most people don't make much. So they don't pay because they can't.
In those circumstances, a 50 page (or 500 page for that matter) lease will not help - they have no money! Suing them will take a year and cost £20,000 so what is the point?
So draw up a 5 page lease written in English and let them read it and in my experience they will just sign it and you can both move on to the next problem
Landlords in the UK traditionally see the tenant as a victim to be ruthlessly exploited and I was probably no different.
Then about ten years ago, it suddenly occurred to me that my tenants were customers. Yes, I know. A revolutionary concept. So, when they have a minor roof repair and ring us up we reply by telling them that it is their problem ("read the lease") but because they are nice people and we are also nice people we will do it at our expense as a gesture of appreciation.
This costs us a few quid but the gain in goodwill is amazing - they never leave, they are happy with a rent increase and some of them probably like us! Well, they hate us less than average anyway. And when we need a favour they help us - yes, really.
A few months ago, we suddenly had four empty units on an industrial estate - two big tenants, both in two units, went bust. Meanwhile, one of our tenants needed more space. And guess what, a couple of tenants agreed to move to other places on the estate at a great cost in inconvenience and a lovely lady across the road asked if she could move in (because in 10 years she had never met her landlord but she knew we were great to deal with). For years, we had let her use our car park free of charge. Why? Well, like I said she is a nice person and we knew that one day she would repay the favour and she did.
So, instead of four empty buildings with empty rates liabilities we are full - and better off by about £180,000pa. All achieved by being friendly, helpful and spending maybe £15,000pa on gestures of goodwill that improve the property.
If some of this is wrong or misleading, please let me know by email
Modified on 16/09/2019 at 08:45:42 by ℗ Bob Cory