Business premises

Finding the right home for your business.

When it comes to premises for your business you need to get the legal essentials right, whether you're buying or leasing. Our simple-to-follow guide could help you avoid turning your new business premises from an asset into a liability.

The legal essentials

You are responsible for making sure that your new premises are fit for business, though as a tenant your landlord may share the duty. There are four areas you’ll need to focus on to protect the business from legal action and financial risk:

1. The survey

A survey will identify any costly structural problems and assess if your premises comply with Health & Safety and planning regulations. You may also need guidance on disabled access to your building, an important part of your obligations under the Disability Discrimination Act.

Who can help?

A chartered surveyor can advise on the structural state of the building, and any alterations needed to make it sound. Contact the Disability Rights Commission for information about accessibility.

2. Service charges

Service charges may cover costs such as maintenance, insurance, cleaning and security. They can form a significant part of your annual outgoings and, if they were to rise sharply, your business could be vulnerable.

Who can help?

Ask existing tenants about the level of service charges and whether the landlord provides efficient services. Try to find out whether significant expenditure is expected in the near future. Your solicitor or surveyor may be able to negotiate a cap on your service charge.

3. Leases

Watch out for penalties or contingency charges that can be triggered at unexpected moments. They could hold you back just when you need to expand.

Who can help?

A solicitor or surveyor will be able to spot any restrictive or unfair terms and suggest suitable break clauses or the right to sub-let.

4. Health & Safety

You can be fined heavily or even shut down if you fail to comply with Health & Safety law. Regulations cover the state of your premises and working conditions, including machine safety, noise, and fire procedures, as well as specific rules for your industry.

Who can help?

The Health and Safety Executive provides guidelines on specific working practices. Your trade association or industry lobby group may be able to offer guidance – for a comprehensive list of trade associations, go to www.taforum.org.

You can also ask for guidance from your solicitor and your local fire safety officer. If you have employees in an office or shop, you’ll need to register with your local council (normally the Environmental Health department). If you have a factory, you must register with the Health and Safety Executive.

 Insuring your new business premises

You need to take out a number of insurance policies to safeguard your business:

  • Employers Liability Insurance – this is compulsory for all employers and provides protection for your employees for injury or disease arising out of their employment.
  • Public Liability Insurance – provides protection against claims from members of the public for injuries suffered on your premises or as a result of an employee's activity.
  • Insurance for the premises and equipment – essential for freehold premises. If you lease your premises, your landlord will normally be responsible for insuring the building, and your lease terms may include suspension of rent if something happens preventing you from using the site.

Getting professional help

Taking on new premises can be complicated so expert guidance is essential, from helping you source the right property to ensuring you get the paperwork right. To help you through the legalities, you should seek help from:

  • Commercial agents. They can search the market for you, tell you about any new developments, and also negotiate the deal on your behalf. Sign up with several agents in your area to help you find the best premises.
  • Chartered surveyors. They know the market and are experienced in negotiating the price and terms of a contract. Talk to them about valuations and structural matters. They may also be able to act as your commercial agent. To find a chartered surveyor, contact the Royal Institution of Chartered Surveyors.
  • A solicitor. They can advise you on the legal aspects of your contract, run legal checks and negotiate on your behalf. To find a solicitor, contact a network like Lawyers For Your Business through the Law Society.

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