New business property advice

Hi All,
I'm having a new venture launched early his year, fingers crossed.
For this I need a commercial premises - most seem to have 3 year leases, and we all hope our businesses last longer than that. So covering all the bases - what's my personal exposure should things not work out?
Is it common practice to haggle with the agent?

Any other tips appreciated

Btw it's a limited liability company - social enterprise

Many thanks

It depends on what the terms of the lease are.

If they don't ask for a personal guarantee and the company is limited, then there will be no personal liability unless it could be proved you haven't been trading lawfully and/or not in the best interests of the business.

If they ask for a personal guarantee which is likely with a start-up, then that will be your liability.

Haggle all you like!

I'm sure the agent would be disappointed if you didn't haggle!

On a more serious note, even if you find they can't / won't move of the base rent there are other avenues you can push them on - rent free periods, capital contribution towards the fit-out etc. Their willingness is likely to be partly driven by general demand in the area and how long the unit has been empty.

Definitely haggle. You might want to consider getting some professional advice as commercial leases are a bit of a minefield often tilted in the LL's favour. You definitely need to check very carefully all of the terms. For instance there's a world of difference between 'put in repair' and 'keep in repair'.

Also consider whether the lease falls inside the act i.e. is protected as this gives you rights to renew; what terms are attached to any break notice (as often these are heavily geared to frustrating you doing so), what you need LL's permission for (alternations etc.) and most importantly what standard of repair / reinstatement and hence dilapidations you'll be responsible for during and at the end. Might not seem so important in the heat of the moment now, but can come and bite / impede you later.

I'm no expert (& rely heavily on professional advisors) who have often saved my neck. Having just defended a £12.8m dilaps claim into less than £2m they've often earned their keep.