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The negotiation process

Don't necessarily think you have to accept the first deal the landlord puts on the table. Nothing is set in stone, so do not be afraid to ask for what you want, even on major points. The degree to which you can negotiate will depend on the market. If the market is slow and the landlord is finding it hard to find tenants, then you stand to negotiate a better deal. If the demand for property is higher and the landlord has other potential tenants, then you will have less room for manoeuvre.

Getting help with negotiations

There is no reason why you shouldn’t negotiate the deal yourself. However, if you are considering taking on larger premises or a more complex arrangement, you can engage a commercial property surveyor to negotiate the terms on your behalf. A surveyor will know the local market and how far you can push the deal. They will either charge you a set fee or a percentage of the rent agreed. You can find a reliable surveyor using our Register of Property Professionals or via the searchable database on the The Royal Institute of Chartered Surveyors website.

Heads of terms

The deal you agree is recorded as 'Heads of Terms' - a summary of the key points, set out on no more than a couple of sides of A4. Use our Heads of Terms checklist to be sure all the relevant items are covered by the agreement you negotiate. The Heads of Terms is not legally binding – and you should not sign it. Any correspondence with the landlord (or his agent or surveyor) at this stage should be headed 'subject to contract'. The Heads of Terms can also be used as a brief to the solicitor. If anything in the Heads of Terms needs to change you should go back to the agent/owner to renegotiate, rather than leaving it to the solicitor as this can waste time and money.

The Heads of Terms form the basis for the lease, which is drawn up by the solicitors for each party. You can revisit the Heads of Terms once the solicitors are drawing up the lease, but it is quicker to get a comprehensive deal agreed up front.

The code for Leasing Business Premises

A revised code of practice has been launched to help promote fairness between landlords and tenants in commercial leases and is the result of pan-industry discussion between representatives of landlords, tenants and Government. The Code for Leasing Business Premises in England and Wales 2007 is voluntary, but the Government is taking a keen interest in ensuring the property industry complies with this Code. You can download the code (which is separated into two sections for landlords and tenants) at www.leasingbusinesspremises.co.uk. The Code also includes a useful model Heads of Terms setting out a detailed list of the main points that should be included in a commercial lease.

Do I need a survey of the property?

You should always take care over your liabilities for the repair of a premises. It is recommended that you engage a building surveyor to assess the condition of the property. When you are considering whether to commission a survey of the property, bear in mind that, even if you are renting small premises, the costs of repairs could be significant. It is therefore best practice to always complete a survey.