Negotiate hard when taking over an existing lease
I came across a recent case recently of a naïve shopkeeper taking on a lease of the shop he had managed for a national retailer. In the process he failed to take proper and professional advice. The National retailer had failed to maintain the building during the period of the lease and sneakily dumped the lease onto the shop manager by assigning him the lease with just a few years left to run.
Often an assignee doesn’t realise that when they take on an assigned lease that they are taking on the repairing liabilities for the whole of the lease period not just the period left which they have the benefit of. If you take an assignment of a lease with just a few years left to run then as the new tenant you must negotiate a dilapidations settlement with the outgoing tenant. Otherwise the old tenant will walk away leaving the new tenant with an unexpected repair bill of perhaps tens of thousands of pounds.
By negotiating a financial settlement to cover the cost of the repairs that have accrued during the initial period of the lease, the new tenant can at least be certain that he has some of the money tucked away in the bank ready to pay for the repairs and any additional costs at the end of the lease will be for repairs that have been arisen during the period of his tenancy only.
Take proper advice from an experienced Chartered Surveyor before entering into any lease.
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