Four tips for finding the perfect premises

In this article: Whether you’re a small or large business, investing in premises is critical to success, here are the four things you need to consider before signing on the dotted line

Acquiring new premises is an exciting time for any business, whether you are just starting out or expanding into your 20th unit. A move heightens anticipation for the future and what it might hold, but before you sign on the dotted line, there are a few points you need to consider. Here are my top four tips for finding the perfect location:

1. Freehold or leasehold?

Consider what kind of premises you want. The big advantage with freehold is that once you’ve made the purchase, it’s yours and it will be attractive collateral if you need to raise finance in the future. However, if you are starting out or acquiring premises speculatively, a short lease of two or three years might be more sensible. If things don’t go to plan, you can hand back the keys at the end of the term, or if business booms, you will be free to move on to bigger and better things.

2. Contamination and pollution

Landowners have a legal responsibility to clean contaminated land. The basic premise is the polluter should pay, but if they no longer exist or can’t afford to, it is up to the landowner to foot the bill. Petrol stations, garages and motor works are (for obvious reasons) common sources of contamination. If you are taking over an existing site that was used previously by a polluter, you may want to consider having it tested. Many large surveyors have environmental contamination specialists who can help.

3. Permitted use

Consider what the site was used for most recently. If it is different to the nature of your motor business, you are highly likely to need planning permission for the change of use. Even if the previous occupant did the same thing as you, planning permission may still be necessary if change of use was requested less than ten years ago. I would recommend asking if the seller/landlord will issue you with a contract that is conditional upon gaining change of use. That way, you won’t find yourself bound to a property you can’t utilise as intended.

4. Due diligence

If you are buying a freehold or taking a lease of more than seven years, you must seek assistance from solicitors. Even if you’re only committing to a short tenure, it is still worth letting us look it over to ensure you avoid anything that might trip you up in the future. Also consider having a survey to check there is nothing wrong with the property’s physical condition. A few hundred pounds spent now could save thousands in the future.

So, if you are in the market for new premises, take your time to work out what will be best for your business, do your research on the site and don’t be afraid to call in professional help. Commercial property experts use our experience and legal knowledge to look after your best interests in any contract negotiations, and will help ensure the location you choose allows your business grow and thrive and doesn’t become a burden.  

Richard Whiteley is the head of the Commercial Property team at Taylor and Emmet solicitors.

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