First foray into commercial property- advice please

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    First foray into commercial property- advice please

    Hi all.
    I’m a complete novice at being a commercial property owner so please be gentle!
    Just had my offer accepted today on a small commercial building which has been used in the past for retail. It’s unoccupied presently and there will be a period of time before I find a tenant for it. I’m worried about costs mounting up if it stays empty for a long period so could somebody please give me a list of what I need to pay for whilst unoccupied? I’m guessing electric, water and I’m assuming there will be business rates to pay. Any tips how to keep these to a minimum would be greatly appreciated…

    #2
    Building insurance: Insurer requirements likely to require regular inspections, premium will be higher than if occupied and you might it it difficult to get cover. Of course if you don't have a mortgage then insurance isn't necessary if you are willing to risk it.

    Protection from squatters and/or vandalism and/or vermin as necessary

    Electricity and gas (if any) will be deemed supply so higher costs than if occupied.

    Business rates, subject to any reliefs.

    Water rates.





    Comment


      #3
      If I was you I would get hold of the type of Estate Agent who offers Commercial premises for sale or rental and take advice as to what rent it would bring in if you listed it with him. Also you should have an Electrician check to see if it would pass an Electrical Safety Check Also find out from the Council what use class the planning permission was for as you would need to find out what sector of business you could rent it out to.
      Good Luck.

      Comment


        #4
        The op's question was about whilst the premises are unoccupied.

        As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good. The agent's advice should /would include asking rent and minimum acceptable, term of lease, tenant break clause and so on. In some cases a premium payable by the incoming tenant might be possible: Normally, each party would be responsible for its own legal costs in connection with the new lease.

        Also you will need an EPC otherwise the premises cannot be marketed let alone let. If the EPC rating is F or G then you would need to do whatever work necessary to get the premises up to.minimum EPC rating. The lowest acceptable energy rating is E.

        If the new lease is to e for 7 years or more then you will need to have a Land Registry compliant plan as the tenant will have to register the lease. Where the premises comprise the entire building then an OS extract might be enough.

        It is prudent to ask your solicitor to let you have the CPSE forms (pre-contract enquiries) to complete in advance as that will save time for despatching the documents to the tenant's solicitors.

        Regarding Use Class, your solicitor should advise on this during the conveyancing for your purchase. Amongst the enquiries made of the seller is what was the previous use of the premises was and when did that use start.

        Your solicitor should also tell you whether and what uses are restricted and/or prohibited under the title deeds.

        Comment


          #5
          Thank you guys for your replies. The premises was used as a shop but I believe the use classes changed recently and there is more room to manoeuvre without having to apply for change of use.

          Comment


            #6
            Originally posted by rentreviewspecialist View Post
            The op's question was about whilst the premises are unoccupied.

            As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good.
            Seriously? - so you wouldn't advise someone who's buying a commercial property to establish his / her return on investment, market conditions etc BEFORE buying then.

            Madness.

            My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

            Comment


              #7
              Originally posted by rentreviewspecialist View Post
              Regarding Use Class, your solicitor should advise on this during the conveyancing for your purchase. Amongst the enquiries made of the seller is what was the previous use of the premises was and when did that use start.
              All of which would (should) be in the original Sales Particulars for the property - its a bit late after you start paying solicitors fees.


              Sorry, but where does the term "specialist" in your username come from?

              My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

              Comment


                #8
                Originally posted by landlord-man View Post

                All of which would (should) be in the original Sales Particulars for the property - its a bit late after you start paying solicitors fees.
                ?
                Why should they be and even if they are then no certainty the information in sales particulars is correct. The usual 'place' to ask is the CPSE



                Comment


                  #9
                  Originally posted by landlord-man View Post

                  Seriously? - so you wouldn't advise someone who's buying a commercial property to establish his / her return on investment, market conditions etc BEFORE buying then.
                  As i said the op's question was about whilst the premises a unoccupied.

                  Since the op has had his/her offer accepted one would reasonably the person to have established their return on the investment, market conditions, etc before making the offer.

                  Comment


                    #10
                    Originally posted by rentreviewspecialist View Post

                    As i said the op's question was about whilst the premises a unoccupied.

                    Since the op has had his/her offer accepted one would reasonably the person to have established their return on the investment, market conditions, etc before making the offer.
                    NO - your advice was "As and when it comes to letting,." he should speak with a commercial property agent. you then went into further detail - which is a little late in the process don't you think?

                    Perhaps your "specialist" comment should have been "I hope that you have done x, y and z to establish your ROI etc"
                    My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

                    Comment


                      #11
                      The market for office lettings is weak right now, which may mean for a far sighted investor that there are bargains to be had. For a thoughtful investor the best time to buy is when the market is in shock.

                      Comment


                        #12
                        Originally posted by landlord-man View Post

                        NO - your advice was "As and when it comes to letting,." he should speak with a commercial property agent. you then went into further detail - which is a little late in the process don't you think?

                        Perhaps your "specialist" comment should have been "I hope that you have done x, y and z to establish your ROI etc"
                        I think you will find that "As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good." I then went on to suggest what the agent could advise on. So it was Piffy''s suggestion that introduced speaking to a commercial property agent, not mine.

                        As to whether I should hope that the op has done (as you say) depending upon the type of property and rent level many landlords do not involve commercial property agents in their decision making.

                        I do not understand what point you are trying to make with your acerbic remarks but you are doing yourself disservice.


                        Comment

                        Latest Activity

                        Collapse

                        • Reply to Can I trust a high st tenant who wants a turnover rent using EPOS records?
                          by theartfullodger
                          Get a couple of people to drop in, pay by cash & see if it goes through till. (Probably will).

                          All electronic systems can be fiddled. All paper systems can be also.

                          Do their business projections show you ending up with more rent or less?

                          Does company run just...
                          18-01-2022, 15:40 PM
                        • Can I trust a high st tenant who wants a turnover rent using EPOS records?
                          by makingendsmeet
                          I would be grateful if anyone could advise me on the following matter. My tenant (a bar company) wants to re-gear the commercial lease on a high st property so that there is a basic base rent and then a turnover rent on top. The tenant states they use an EPOS system at the business and they will create...
                          18-01-2022, 15:22 PM
                        • Tomlin Order Implied Terms of Contract
                          by top_cat
                          Tomlin Order agreed and signed on 1st Jan 2021. Concerns removal of Hogweed from Claimant's property by Defendant. Order states that:

                          1.) Defendant shall make enquiries with PCA contractors within 28 days of the date of this Order.
                          2.) The Defendant shall instruct contractors to treat...
                          18-01-2022, 13:56 PM
                        • Reply to New tenants New lease
                          by Piffy
                          I can be wrong on this: As I understand it if a lease is "outside" the 1954 Act, when the lease ends the tenant has to leave.
                          Inside the Act means that at the end of the lease the tenant has the right to ask for a new lease, even if words in the lease say The tenant will leave at...
                          18-01-2022, 10:13 AM
                        • Reply to New tenants New lease
                          by artin
                          Piffy,

                          Thank you for the reply.
                          Is the 1954 act to do with "exclude security of tenure"?
                          17-01-2022, 19:22 PM
                        • Reply to New tenants New lease
                          by Piffy
                          I have been both a landlord of Commercial Property and still am a tenant
                          Over 45 years ago when I took on my first Commercial Lease which was being handled by a Chartered Surveyor it was a condition of the new lease that the applicant (myself) paid all the solicitors fees for the creation of...
                          17-01-2022, 15:47 PM
                        • Reply to New tenants New lease
                          by rentreviewspecialist
                          In principle, to base a new lease on a previous lease - common practice amongst lawyers - subject to updating / modernisation and reqording of covenants and conditions for the new letting .

                          However, question is whether to use the previous lease in its entirely would breach copyright belonging...
                          17-01-2022, 15:36 PM
                        • New tenants New lease
                          by artin
                          Hi
                          I will be looking for new tenants soon so will need new lease drawn. It's a small commercial unit 1500sq ft, trying to cut cost of hiring solicitor.
                          Can I use the previous lease which was issued by a commercial property lawyer? Online leases? Any advise?
                          Thanks
                          17-01-2022, 10:38 AM
                        • Rent arrears: eviction?
                          by John J
                          My commercial tenant is in *serious* rent arrears - 10 months into the tenancy she's only paid one month. She has a standard Law Society lease.
                          Can anyone advise if Covid rules prevent me from evicting her?

                          Thanks....
                          15-01-2022, 09:17 AM
                        Working...
                        X