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Natalie Cass

Solicitor - Sevenoaks

18th May 2022

Six points every Landlord should be thinking about when preparing to grant a new lease

Six points every Landlord should be thinking about when preparing to grant a new lease

How the existing use of the premises is authorised

You will likely be asked by the tenant for a copy of the planning permission or established use certificate which authorises the existing use of the premises. If this does not exist, that can lead to confusion about the lawfulness of the use – which in turn can inhibit a letting.  Thinking critically about what the legal basis is for the use is important and we can work with you to do this where there may appear to be a problem.

Building regulations completion certificates

If you have made alterations or changes to the premises which required building regulations approval, it is likely you will be asked for copies of the building regulations completion certificates evidencing that the completed works comply with building regulations. If the work has been done but the completion certificate has not been issued, time could be lost regularising matters.

VAT option to tax

If you have ‘opted to tax’ the premises, the tenant will need to pay VAT on the rent. You will likely be asked for a copy of the option to tax and the notice of the option given to HMRC and any notices and correspondence received from HMRC in relation to the option. If you do not have a copy of the option to tax to hand, it can take a considerable amount of time to obtain a copy from HMRC. If you do not know if there’s been an election to opt tax, it is likely that your accountant would have dealt with this and further enquiries of your accountant should be made. There can be long delays if you have to contact HMRC for confirmation of the position.

Energy performance certificates

Unless your premises is exempt (e.g. it’s a listed building), you must commission an energy performance certificate, which will rate how energy efficient the premises are, before marketing the premises. You’ll also need to make the energy performance certificate available to the prospective tenant. Several weeks can be saved if the energy performance certificate is arranged prior to the lease process starting.

Asbestos assessment

If you are the freeholder and there’s no existing tenant, you must determine whether asbestos is/likely to be present in the premises and manage it, assess the risk and have an action plan and system in place for managing the risk. This is often satisfied by obtaining an asbestos assessment. It is likely that the tenant will ask for this, which could delay the lease process by several weeks if the assessment has not already been carried out. Check first if any previous tenant carried out an assessment, as it is likely they had primary responsibility for carrying one out whilst they occupied the premises. This will only apply to premises built before 2000.

Fire risk assessment

It is helpful to have a fire safety risk assessment, and implement and maintain a fire management plan, if you are the owner of the premises and the premises are vacant. Just like an asbestos assessment, a fire risk assessment can take several weeks to arrange. This delay can be avoided if the assessment is done in advance of the lease process. Again check if any previous tenant carried out an assessment because this is an occupier’s statutory liability.

Contact Us

If you are considering granting a new lease or require further information or assistance regarding a wide range of landlord and tenant law including Green Leases, please contact Natalie Cass in Rix & Kay’s Commercial Property Team or call 01732 440852.

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