Things to consider before signing a commercial lease in Scotland

Whether you are opening a retail store, office space, or a restaurant, establishing a new business or relocating an existing one, it is highly likely you will have to enter into a commercial lease agreement.

Signing a commercial lease in Scotland is a significant decision that can have long-term financial and legal implications, so it is crucial to thoroughly understand the terms and conditions you are agreeing to. Here are some key things to consider before you sign on the dotted line.

Length of the lease and flexibility

Make sure the length of the lease is one that is most appropriate for your business needs. You will also want to consider changes in the future and if you may need to extend the lease or terminate it early. The ability to sublet the premises could be very beneficial if you need to downsize, expand, or relocate your business.

Check the conditions and notice period required to terminate the lease and any penalties or obligations that may arise. Then you can negotiate termination terms that are reasonable and practical for your business, allowing you freedom in case of unforeseen circumstances or other changes in your business requirements.

Condition of the property and repairs

You should inspect the property thoroughly before signing the lease, note any necessary repairs or improvements and decide who is responsible for them. You must also ensure that the property complies with health and safety regulations and any specific requirements for your business operations.

It’s important to determine who is responsible for things such as structural repairs, common areas, and utilities, and clearly define these responsibilities in the lease agreement to avoid disputes or unexpected costs later on.

Permitted use and restrictions

You’ll need to verify that the lease permits your intended use of the premises. Some leases may have restrictions on certain activities or changes of use. Ensure that the lease agreement matches your business requirements and growth plans, both currently and in the foreseeable future.

Financial considerations

Remember that you won’t just be paying rent. There are other costs associated with leasing a commercial property such as service charges, property taxes, insurance, and maintenance. Take time to clarify how these costs will be allocated and whether they may increase over time and carefully assess your budget to ensure that the lease is financially viable for your business.

Make sure you understand the terms of the lease

Before signing any legal document, thoroughly review the lease agreement and ensure you understand all of its terms and conditions from rent amount, payment terms, rights and responsibilities, to permitted use, and any restrictions. You will not be able to plead ignorance at a later date once the lease is signed.

Seek legal advice

A solicitor experienced in commercial leases can review the lease agreement, identify any potential pitfalls, and negotiate favourable terms on your behalf. Each commercial lease is unique, and it is crucial to carefully review and understand all the terms and conditions before signing. Seeking professional advice to navigate the complexities of commercial leases helps ensure your interests are protected.