Is there a ready-made lease form for owners who want to leave a property vacant for short-term use while the owner looks for a long-term commercial tenant? Yes there are. As I reported in Meanwhile… What are we going to do with all the empty shops, SNR Dentonas has prepared a leasing model as part of the Local Communities and Governments Meanwhile Project to encourage the temporary occupation of empty commercial premises in the center of the city by non-commercial occupants, who may contribute to the vitality of the city center but who otherwise could not afford normal commercial rents. The lease is available on the Communities and Local Government website. Although both parties to the lease should seek professional advice (and the landlord should inform the tenant that they should do so), the idea is that the lease should be adopted as an industry standard lease for this type of temporary lease. and to prevent everyone from wasting time and money haggling over the fine print and trying to reinvent the wheel (which a lot of property attorneys like to do…they don’t get out much and it makes them feel important, I must know!). This way, the occupant can quickly move in and still make valuable use (as well as in the meantime) of an asset that is going to waste. The leasing model strikes a fair balance between landlords and tenants in trying to manage the risks involved in this type of leasing. The key features of the lease are:
- A zero rent or “peppercorn”.
- If applicable, a monthly service charge and building insurance contribution. In the notes, owners are urged to be fair and reasonable in considering whether these contributions are necessary and, if they are, to collect on a “no gain, no loss” basis.
- A fixed term (probably up to 3 months, but can be longer) but no legal right to renew the lease at the end of the term or to ask the landlord for a new lease, so it would be a matter for negotiation only.
- Rights of landlord and tenant to terminate the lease with short notice periods (suggested periods are 2 weeks for tenant, 4 weeks for landlord). Tenants should make sure they can vacate quickly if the landlord gives them notice. There is a suggested 3 month minimum occupancy period, although this can be waived to allow notice to be delivered at any time.
- The tenant is responsible for business fees and other expenses (electricity, water, telephone and other services). Meanwhile, many uses are eligible for commercial rate relief, while for homeowners there may be substantial savings as a result of not having to pay empty rates.
- An option for the landlord to retain a damage deposit
- Limitations on modifications to property, only to allow for signage and installation of loose shop fixtures (or otherwise as agreed).
- Limited repair obligations to the tenant, with a photographic schedule of condition required to show what condition the property is in at the beginning of the lease and excluding “normal wear and tear” from the tenant’s obligation.
- Use restrictions and hours and an option to include a restriction that the use cannot be for commercial or profit purposes (in the meantime, most users are not for profit).
- There is no assignment or subletting, but the tenant can share with a designated entity or person if the owner allows it.
- The landlord may continue to market the property to commercial tenants and post a lease board. This is a key feature of meanwhile use compared to a normal short-term lease, because it recognizes that the search for commercial use is ongoing. If the landlord finds a commercial tenant, he or she will probably want to end the lease using the break clause. This may sound harsh, but it’s really the only way to persuade homeowners to accept this program in the first place.
- A “blank” section at the end for any special provisions.
There is also an alternative form of tenancy where an intermediary (such as a local authority or charity) takes a lease from the landlord and then sublets with the temporary occupant. What else is there to think about? Superior Landlords and Mortgages The landlord may need to obtain the consent of a superior lessor, if any, and possibly also any mortgagees, to sublet for temporary use (or not at all), as they will be concerned with preserving quality and value of your investment. This is less likely to be a problem on the main street, where most of these leases will occur. Insurance Occupants may require liability and contents insurance. This is separate from the lease’s potential obligation to reimburse the landlord for the cost of insurance on your building. Planning If the property is only going to be used for 28 days or less and is an open site rather than a building (so not very useful for a shop), you may not need planning permission, but you should check Check with your local authority and make sure “temporary” use does not exceed that period. In most cases, the owner and the tenant will have to think about whether there is going to be a change of use that implies the need for a building permit. The lease does not allow the tenant to apply for planning permission, so this will need to be considered before signing the lease.
Other permits, such as listed buildings and building regulations, may also be required. In a May 2010 report for the Meanwhile Project (providing a useful overview of the overall scheme), SQW Consulting commented that “planning law enforcement appears to be inconsistent across areas, with some areas proving quite restrictive.” in uses in the meantime with respect to changes in use.” They recommend that “a consistent national policy or at least a ‘model’ policy for local adoption can help address unnecessary problems, while allowing legitimate concerns of planning are adequately addressed.” Local authorities should be encouraged to offer a temporary permit that has no effect on subsequent use, and to do so promptly when applications are made so that the opportunity to use is not lost in the meantime. The use of Local Development Orders could accelerate change of use that would otherwise require planning permission Is a coherent national policy or a “model” policy compatible with the government ideas of “Big Society” and “Localism”? “? As I said in my last post on this topic, at this point that’s anyone’s guess, though I would suggest helping the non-profit sector by helping make suitable properties available for volunteers and others to use should be a great partnership. . goal, whatever that might mean. It would certainly be worth it.