If you’re thinking about buying or setting up a business – whether it be a café, a children’s day nursery, hotel, or a care home – the premises and location from which the business operates will be critical to its success.
The rights and obligations you take on as occupier of the premises will also impact on your business and depend, to a large degree, on whether you buy or rent your commercial property.
How to choose the right business premises
As an entrepreneur starting a new business, you will have freedom of choice as to where and what type of commercial property to operate from and on what terms (although there are generally far fewer freehold commercial properties on the market than leasehold).
As a buyer of an existing business, on the other hand, it’s usual for the purchase price to include a transfer of the existing associated premises, whatever the nature of the tenure.
Regardless of your personal circumstances, or whether the commercial property in question is freehold or leasehold, there are a number of factors that should always be considered before deciding whether a particular commercial property is the right choice for your business.
4 key considerations when buying/renting business premises
You will need to:
- Satisfy yourself that the premises match your business needs, can be used for their intended purpose, and (unless you are an online business) that there is sufficient demand for your product or service in the locality;
- Make sure that the premises comply with any necessary regulatory requirements as to space, facilities and health and safety relevant to your business, as well as any planning legislation;
- Ensure you have the necessary finance to lay down a deposit (either for a commercial mortgage if the premises are freehold, or for a rent deposit if the property is leasehold) and sufficient cashflow to manage monthly mortgage/rental payments, as well as meet other costs associated with the premises such as buildings insurance, business rates and utility bills;
- Be 100% certain as to what legal rights you will have as occupier of the premises – and, for that matter, the extent of any obligations and/or restrictions that you will have to comply with.
In short, don’t rush in! The law relating to commercial property is complex and many entrepreneurs and business buyers learn to their cost that making assumptions based on first impressions is dangerous.
It’s vital, then, that you seek advice from a specialist solicitor, both to review the contract documentation and to carry out a thorough investigation of the property as part of the pre-contract enquiries before you buy the business.
Make a free enquiry
If you’re thinking about buying a business which includes associated commercial property, we can help. The sooner we become involved in the process the more likely it is that your purchase will be successful, so please contact us today.
Our full contact details can be found on our Contact Us page.
We look forward to hearing from you.