RICS launches free small business retail lease
The Royal Institution of Chartered Surveyors has launched a free small business retail lease to attract new and independent retailers into vacant high street space.
Developed in collaboration with the British Retail Consortium, the lease has been devised to simplify the often complex and time-consuming process associated with commercial property leases.
RICS said the new contract, which is freely available from the organisation’s website, will enable quicker occupation of retail premises by SMEs, helping to support the independent retail sector and stimulate the British high street at a time when latest figures from the BRC show town centre vacancy rates of 11.1%.
Paul Bagust, associate director for professional groups and forums at RICS said: "In simplifying the leasing process for landlords and small business tenants, we hope to support SMEs and provide a boost to the British high street in a time of decline – thereby contributing to overall UK economic productivity. Moreover, by offering mutually beneficial terms to landlords and tenants in a flexible lease, we are directly addressing the principles of the Code for Leasing Business Premises - identified in the Portas Review as a key tool in tackling the high street’s decline."
The lease takes the form of eight page proforma and aims to provide the tenant with fixed property costs and a clear picture of the responsibilities they are signing up to. Intended for leases of up to five years, the standalone short-term contract with no rent review offers flexible terms for occupiers, including break clauses. RICS said that landlords will benefit from rental income on a previously unoccupied space that can then re-establish its viability in the market place.
In response to industry feedback, RICS and the BRC have developed two versions of the lease, one with security of tenure under the Landlord and Tenant Act 1954 and one without. Under the Act tenants have the right to renewal of the lease. In circumstances where this may not be appropriate RICS said that landlords should state at the start of negotiations that the protection of the 1954 Act is to be excluded and encourage tenants to seek early advice as to the implications.
BRC director of business, Tom Ironside, said: "The high street is a much-loved institution but it can be a tough place to trade, with property costs a significant challenge for all. Negotiating the complicated and costly process of getting the first lease for a shop is a sizeable hurdle which our lease removes.
"Shockingly, more than 11% of town centre properties are currently standing vacant. As well as assisting individual retailers this new lease will make it quicker and easier to get those empty units back into use, preventing them acting as a drag on the performance of an entire area.”
The lease and explanatory notes can be downloaded from www.rics.org/smallbusinesslease.
Email this article to a friend
You need to be logged in to use this feature.
Please log in here