When buying or leasing property how many times and how long do you spend looking around and asking questions before committing yourself? From my experience prospective tenants or purchasers come to a decision within minutes of walking over the threshold. There is nothing necessarily wrong in this. I do though suggest there are a considerable number of questions you should be asking. Just some you may wish to consider are:
- What are the physical boundaries to the property and are these the same shown on the title deeds / lease plan?
- You may think that in today’s technological world of course drawings will accord with the physical boundaries. This is by no means the case. We were recently asked to value a property with a view to putting it up for sale. I don’t know if this was by chance or not but unusually a title plan was provided. The boundaries of the property and the title bear little relation to each other.
- Look to see if a third party has a right to pass across the property or indeed if there is a right to cross over neighbouring properties. This may impact on a property’s value and have privacy implications.
- What is the overall state of repair externally and internally including items such as the windows, the fixed electrical system and the boiler? How much is it going to cost to bring the property to a condition where you are happy and in compliance with any lease terms? If there are repairs and decoration you can’t do, do you know someone who can?
- If a property is leasehold:
- Is there a service charge? What does the service charge cover and is it value for money?
- What are the landlord’s fixtures and fittings and are these documented?
- If the landlord is insuring the property and has a right to recover the premium is the cover reasonable and on what basis is the premium apportioned?
- What is the user covenant? If restrictive might this limit the opportunity to assign at a later date?
- If everything goes wrong can you afford to meet all outgoings until the lease can be broken?
- Is the property assessed for rates? If so is the assessment reasonable and is this likely to rise or fall at the next revaluation?
- What is the planning consent for the property? Does the consent have conditions such as times of operation?
The above should not by any means be considered as exhaustive. You can no doubt think of many more. If you read my last jotting I suggest you might wish to consider just one more question. Is this the time to spend to save?
Next jotting – Commercial Rent Arrears Recovery and could it effect you?
Jeremy’s jottings do not constitute advice on any specific matter. Lawson Commercial recommends you seek professional advice before taking action. No liability can be accepted by us for any action taken or not taken as a result of the jottings.