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Renting Out Commercial Property: The Tenant’s Rights

By : acelegal, November 24, 2016

Commercial Property

If you are a tenant renting a commercial property for your business, it is vital to understand how your contract works to protect you and your landlord. Most commercial property leases are full repairing and insuring leases, which means you, as the tenant, become liable to keep the property in good repair and to keep it insured.

Your lease is the contract that will protect you and your business in any difficult situations, and you should ensure that you engage a solicitor who is experienced in commercial property law to check the details of your lease. Primarily, your solicitor will establish that your landlord is the legal owner of the property you are renting, and that he or she has the right to rent it to you.

What Are A Commercial Property Tenant’s Responsibilities?

  1. Pay the agreed rent. Since commercial leases are more complex than residential leases, you may be able to negotiate the rent payable with your landlord. VAT may be chargeable on your lease, and this can be recovered through the course of your business if you are VAT registered, but this must be investigated thoroughly before you sign the lease. Check how often you will be subject to rent reviews, and ensure that there is an arbitration clause in the lease, which will allow you to negotiate increases via your appointed experts rather than being subjected to unreasonable increases.
  2. Pay relevant charges. As lessee, you will be liable to pay local rates and service charges, refuse charges, water charges and any other relevant expenses. You should be able to produce receipts for these expenses if your landlord requests to see these at any time.
  3. Check the small print. You must ensure that the property has planning permission for your intended business use, and you should ask for a survey before signing the lease to ensure that any major repairs are undertaken before you occupy the property. If you are sharing the premises with other tenants, you should also be clear about your right of way for access and for water, utilities and sewage. You will usually be entitled to a fit out period to prepare the property for the commencement of your business, and this will usually be rent-free.
  4. Pay attention to your insurance policy. As lessee, you will be required to keep the property in good repair throughout your tenancy, and when the tenancy ends, ensure it is in a similar condition to when you began occupying it. You must keep the property insured throughout your tenancy, and you should be aware that your landlord may need to access the property to make any repairs for which he or she is liable.
  5. Know your rights. Under Irish law, after five years of continuous occupation, you will be entitled to renew your lease as long as you have complied with the terms and conditions of it. This may be overturned by a deed of renunciation, but if you have leased the property for more than twenty years, it cannot be overturned. If you do not want to commit to a long-term lease, you should look for a break clause that will allow you to get out of the letting agreement, should you wish to do so, after a certain time period has elapsed. The terms and conditions of this break clause must be checked by your solicitor, as failure to adhere to any conditions, including any time limits imposed, may mean that you forfeit the chance to exercise the clause.

Find Property Solicitors in Cork

Whether you are a tenant or a landlord, we can help you to ensure that your commercial property lease will protect you and your interests. Contact Irwin, Kilculllen & Co Property Solicitors in Cork City for a free consultation without obligation. Simply contact us online or call us today on +021 4270934 to talk to our experienced and helpful team.