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Commercial Surveyor Services

Bradley-Mason LLP is a Chartered Building Surveying practice who offer the full range of Surveying, Building Consultancy and Project Management Services throughout the UK.

Our senior level team provide expert advice, with a focus on a quick turnaround service to maximise value and to fully understand our client’s businesses and property requirements. Ranging from investment funds and private Landlord’s to High Street retailers and commercial Tenant’s, we offer advice on the whole life cycle of their property interest from acquisition to disposal. Our aim is to predict your needs and ensure your expectations are exceeded. We question your requirements to ensure that our services are tailored to your current and future needs.

12 common commercial lease terms and how they affect your tenancy

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Before taking on a commercial lease, it’s important to check the document carefully. Obviously, this applies to any legal contract, but smaller business owners in particular may be unfamiliar with the terms and conditions that go with the leasing of premises – be they office space, a shop or restaurant, a workshop or medical establishment.

A lease should always be agreed in writing (though there are some cases where a verbal lease agreement may have the force of the law) and it is imperative that you review the rights and obligations set out in the document with a fine toothcomb before committing to it.

 

At Bradley-Mason, we deal with a wide range of clients from a variety of sectors including hotel, leisure & tourism, healthcare, retail, industrial and property sectors, advising on building consultancy and compliance, acquisition, occupancy and disposal with a portfolio of specialist services. We’ve put together an overview of some of the most common terms used, and what they could mean for your business.

  1. Security of Tenure

The document should state whether the lease is protected by the Landlord & Tenant Act 1954 or whether it is contracted out of that Act. If you have security of tenure, you have the right to a new lease at the end of the existing one. If not, you will have no such right and can be evicted immediately upon the expiry of the lease.

  1. Rent

The lease will stipulate the rent amount, when it is payable and sometimes the mode of payment too (e.g., direct debit or standing order). Monthly rents are often paid quarterly in advance on the ‘quarter days’ of 25th March, 24th June, 29th September and 25th December. Typically, there will be no formal demand or invoice issued, though you will likely have to pay interest at a specified rate on late payments.

  1. Rent Reviews

A rent review clause specifies when the rent will be reviewed and may be adjusted – typically every 3-5 years – to ensure that the landlord continues to receive the ‘market rent’. The technical and legal process to establish the new rent will be specified in the least, with ‘upward only open market rent reviews’ being the most common.

  1. User

The ‘user’ clause relates to what the leased property is permitted to be used for and, importantly, whether there are any restrictions or limitations in place that could be a problem for your business. While you are doing your research, also double check that any and all necessary planning consents have been obtained.

  1. Repairing Obligations

Most new commercial leases are granted on a full repairing and insuring (FRI) basis, meaning it is the tenant’s responsibility to carry out repairs and pay for premises insurance. Every lease is different when it comes to specifying what exactly is meant by ‘repair’, and unsurprisingly this is one of the most hotly disputed elements of commercial leases.

  1. Dilapidations

Tenant responsibilities in terms of dilapidations, reinstatement and fittings & fixtures are critical to understand at the beginning of the lease, since you will be required to return the premises to a specified state of repair (e.g., its condition at the start of the lease term). Consult with a specialist dilapidations surveyor to understand and manage your obligations and dilapidations costs.

  1. Lease Term

The lease ‘term’ is the duration of your tenancy, which is usually negotiable. Typical leases can be 3-5 years long, but longer lease terms for up to 25 years are not at all unusual. The important thing is to ensure that the lease term suits your financial projections and business objectives in the short, medium and long term.

  1. Subletting and assigning

Are you able to sublet some or all of the property to another party, so that they become your de facto tenant? Are you able to reassign or transfer (i.e., sell on) a remaining lease term to another party? If so, are there any restrictions, or could you still be held responsible for rent and other commitments in case the incoming tenant doesn’t honour them? It’s a legal minefield that needs careful scrutiny.

  1. Alterations

Another potential minefield is the area of the tenant making alterations to the building. What structural/non-structural changes can you make and do you need the landlord’s formal consent by way of a Licence to Alter? Will you have to reverse the alterations at the end of the lease term as per your dilapidations obligations?

  1. Break Clauses

Many commercial leases include a break clause, giving the tenant the right to terminate the lease early, for whatever reason, by giving notice in writing at a specified time. The greater flexibility may be just what a growing business needs. However, if the landlord also has the right to break early, this can create unwelcome uncertainty for your business.

  1. Service Charges

Carefully check your obligations with regard to the upkeep and maintenance of any shared spaces or communal grounds. Most leases are ‘triple net’, meaning you pay rent, your share of property taxes and your share of Common Area Maintenance (CAM). There will also be an amount payable for Capital Expenditure (major building repairs, e.g., repairs to roof, foundation or HVAC installations),

  1. Personal Guarantee

While many landlords prefer individual business directors to provide an additional personal guarantee for their commercial lease, this is something that you can negotiate. Where possible, personal guarantees should be avoided or, at the very least, limited to a portion of the least term. Taking independent legal advice is highly recommended.

 

At Bradley-Mason, our team has a wealth of commercial property experience and can help both landlords and tenants with a range of Commercial Building Surveys, Building Consultancy, Access Consultancy, Schedules of Condition, Dilapidation Surveys and much more besides. With five offices throughout the UK, we are ideally placed to meet your needs, wherever you are based. Contact us for details.

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

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Minimum Energy Efficiency Standards (MEES)

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Information and advice for Landlords to maximize the opportunity of improving the EPC rating of their property portfolios, ahead of MEES regulation changes and more stringent EPC rating requirements.

Background

Energy Performance Certificates have been a Statutory requirement for new Leases of commercial properties since 2008. The report assesses the energy efficiency of the building fabric and services installations of a building, and the building is given a rating on a scale from A-G with ‘A’ being the most energy efficient and G least energy efficient.

Under the Energy Act 2011, Minimum Energy Efficiency Standards (MEES) were introduced to provide a structure to the improvements that need to be made to commercial buildings, with a timeframe stipulating a gradual improvement in the minimum rating that must be achieved in order for new and existing tenancies to be compliant.

Summary of Key Dates

In relation to non-domestic properties in England and Wales implementation of the Regulations is to come into effect in the following stages:

MEES contains two separate short-term requirements:

  • From April 2018, MEES triggered an enforcement mechanism whereby landlords will not be permitted to grant a lease of a commercial property with an EPC rating below E unless they have carried out all possible cost-effective energy efficiency improvement works, or an exemption applies.
  • From 1 April 2023, landlords will not be permitted to continue to let a commercial property with an EPC rating below E on an existing lease unless they have carried out all possible cost-effective energy efficiency improvement works, or an exemption applies.

 

The Department for Business, Energy & Industrial Strategy has published a new Energy White Paper, which sets out a new mid-term target to uplift the existing MEES regulations

  • By 2027 a minimum threshold rating of C must be achieved.
  • By 2030 a minimum threshold rating of B must be achieved.

These dates are currently in a consultation period and if approved the updated MEES Regulations would come into force on 1st April 2025.

Exclusions and Exemptions

  • The guidance set out in ‘The Non-Domestic Private Rented Property Minimum Standard’ document confirms that MEES will only apply to those properties which require an EPC by law.
  • Identifying if a building or tenancy are affected by MEES is not straightforward, as there are various exclusions and exemptions Landlords can claim for depending on the circumstances surrounding the property.
  • In all cases Landlords are advised to obtain their own independent advice in relation to possible exemptions and must ensure that all exemptions are registered via the central government PRS Exemptions Register.

Enforcement and Penalties for Non-Compliance

  • Local Weights and Measures Authorities (LWMAs) will enforce the provisions set out in the MEES regulations as well as Trading Standards who will also undertake enforcement activity.
  • The enforcement teams can impose hefty penalties for Landlords that do not improve their properties. These are broken down as follows:

– Breach for less than 3 months: 10% of the ratable value (min. £5000/max. £50,000)

– Breach for more than 3 months: 20% of the ratable value (£10,000/max.£150,000)

– Providing false or misleading exemption information: max. £5,000

– Failing to comply with a compliance notice: max £5,000

Dilapidations Matters

  • The MEES regulations are set to impact existing leases from 1 April 2023. Landlords will have to undertake all reasonable efforts to implement improvements to their properties, excluding exempt properties to improve its EPC rating during the term of a lease.
  • The Jervis v Harris clause which provides certain powers to the Landlords to enter their property to carry out repair works when tenants fail to do so, will not have the same enforcement under the new regulations. The new regulations place the obligations on the Landlord to carry out the works, therefore entry to a property, mid-term will unlikely be unlawful under the Leasehold Property (Repairs) Act 1938.
  • ‘Green’ Lease provisions are seen to be the answer to facilitate access for MEES improvements, ensuring both the tenant and landlord share the benefits of any improvements made to meet the new standards. However, undertaking works with vacant possession will typically be contractually simpler and more economical.
  • There is potential for strong supersession arguments at lease end, due to wholesale replacements of mechanical and electrical equipment, for example, being required due to poor energy ratings.

Protecting your Property Assets

  • The second stage of MEES comes into force in April 2023, it is therefore the optimum time consider steps to achieve compliance, and budget for any necessary improvement works.
  • The proposed implementations of the minimum EPC Band C by 2027 and EPC Band B by 2030 need careful consideration by Landlords in advance of the deadlines, to ensure your property or portfolio of properties meet the requirements.
  • Where a property does not meet the necessary requirements on the PRS exemption registers Landlords should seek professional advice on how best to budget for improvement works and how such improvement will impact on any current tenancies.
  • Landlords should consider lease events within their portfolios to maximize works on vacant properties prior to key rating threshold changes.

 

Bradle Mason LLP, we are well placed, along with our specialist partners, to provide expert advice, providing Energy Appraisals of each individual property, highlighting necessary works required to achieve compliance, and managing the implementation of these works, whether, for instance, that relates to installation of renewable energy sources or improvements to the building fabric, or services. Please contact one of our team to discuss how we an assist and the next steps.

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

 

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Dealing with Dilapidations – what you need to know

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The vast majority of commercial leases contain repairing obligation clauses which specify the extent of the tenant’s responsibility to maintain and repair the property being leased. The landlord will be concerned to see that the property is not devalued by a tenant’s neglect, so clauses in the lease will set out cleaning, redecoration, repair, prevention of alteration etc. Failure to comply with these clauses will leave the tenant open to landlord action to enforce the lease covenants.

Dilapidations are breaches of covenant to repairing obligations, leaving the landlord to recover the loss suffered as a result of the tenant’s failure to maintain the property as per the lease terms and/or return the property in its original state at the end of the lease term.

Bradley-Mason LLP are leading specialist commercial dilapidations surveyors acting for tenants and landlords in all aspects of dilapidations and leasehold repair matters. Our Dilapidations Surveys are highly detailed investigations into the current condition of the building and can be undertaken during the lease term or towards the end of a tenancy.

Established in 2004, we use a proactive approach to advising clients aimed at ensuring compliance with the Dilapidations Protocol while avoiding unnecessary costs and minimising the need for lengthy disputes or legal proceedings. Take a look at some of our Dilapidations Settlements and Surveys Case Studies to see the depth and breadth of our work.

Why tenants should consider dilapidations at the outset

When searching and budgeting for business premises, business will typically consider obvious cost lines such as rent, business rates, utility bills as well as any service change and fit-out costs. However, thinking about dilapidations liabilities that might arise at the end of the lease is unlikely to be front of mind at the beginning of the term. Unfortunately, ignoring or underestimating the impact of dilapidations can lead to potentially expensive and unexpected costs being incurred.

Much better outcomes can be achieved by agreeing clear repairing and dilapidations clauses at the outset. This is key information that the tenant can use for assessing the suitability of the premises before signing the lease and estimating their liability during and at the end of the lease.

In particular, the following factors should be taken into account:

  • Age, size and type of property
    Are you looking to rent modern office premises or a period building? Is it a small retail unit or a large industrial shed?
  • Construction materials
    What is the physical condition of the building? What building materials are used? Is there evidence of deleterious materials or contamination? Is the building statutorily compliant?
  • Lease term
    How long is the lease? Is it a new lease or are you taking over a remaining lease from another party by way of assignation?
  • Schedule of Condition
    Does the lease contain, or can you insist on obtaining, a photographic record to show the property’s condition as a benchmark for your repairing obligation?
  • Repairing obligations
    What is the extent of your liabilities? Are you responsible for the interior or the entire building? Do you need to redecorate at the end of the lease? Who repairs the roof?
  • Fit-out
    Are there any conditions/limitations for fitting out the leased premises? Do you need to remove your fit-out and reinstate the property to its original condition when you exit?

What happens at the end of the lease term?

A commercial lease will usually allow the landlord to serve a Schedule of Dilapidations on the tenant specifying any repairs that the tenant is liable for during the lease term and within a reasonable amount of time after the end of the lease. We would recommend that a specialist dilapidations surveyor such as Bradley-Mason LLP is instructed to prepare and serve the necessary documents.

Where a dilapidations liability exists, the following options may be suggested:

  • The tenant will complete the necessary works at their own expense. Where they fail to do so, the landlord will instead complete the necessary works at the tenant’s expense.
  • The landlord will complete the necessary works at the expense of the tenant.
  • The tenant will pay the landlord compensation equivalent to completing the necessary works, regardless of whether the landlord actually carries out the works.

How Bradley-Mason LLP can help

Dilapidations is a complex area that requires specialist expertise to advise and guide both landlords and tenants. The sums involved in disputes and litigation can run into millions of pounds, so getting the basics right at the beginning is of critical importance.

At Bradley-Mason, our experienced dilapidations surveyors provide extensive expertise and professional advice regarding potential dilapidations under new or existing lease arrangements. We can also help with regular advice in respect of interim dilapidations during the lease term. Whether you are a landlord concerned about your tenant’s breach of repairing obligations, or a tenant concerned about your landlord’s unrealistic dilapidations claim, we can advise on the obligations under the lease, ascertain the legal position and develop a strategy to agree an acceptable outcome.

Get in touch to discuss your dilapidations matter with our expert team.

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

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What is Subsidence?

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Subsidence is the steady downward movement of a building or structure caused by changes in soil conditions or underlying ground movement. As the ground moves lower, the foundations of the building can become misaligned. This process may cause the walls and floors to move, which can lead to cracks and cause the building to be unstable.

There are several common reasons for building subsidence:

  • Following a drought, the soil can dry out causing subsidence
  • Vibrations in the ground caused by passing traffic or excavations
  • Heavy rain or leaking drains have damaged the soil and its foundations
  • Old mines or quarries can cause instability as the material used to fill the site will move as it decomposes
  • Trees might be planted too close to the property, plants drain the moisture from the soil causing it to dry out and sink
  • The age and construction of the building can be a risk as the older the building is the more risk that the foundations are shallower. However, older buildings tend to be built from bricks and lime mortar which tend to be more flexible
  • New homes or extensions can often experience cracking as the structures settle under their own weight.

Subsidence usually occurs in majority clay or silt soil as these are both cohesive, which enables them to swell and shrink when wet or dry. This is the surface where the biggest changes can be seen. Subsidence can also be mistaken for heave; however, this is the opposite, as this is when the ground swells upwards. This is usually due to the clay soil becoming wetter than usual.

Signs of Subsidence

There are many signs of subsidence that can either occur on the outside or inside of the building. The severity of the problem can be identified based on the visible signs.

If subsidence has occurred, cracks are likely to have appeared in the walls. Not all cracks can be a sign of subsidence. The cracks will usually be diagonal and visible on internal and external surfaces. They tend to be wider than 3mm and can usually be found in close proximity to a door or window.

Another telling sign is sloping or sinking floors. These can be easy to identify as the floor may appear uneven and gaps may emerge near the skirting. A further key indication is sticking doors or windows. This can be due to movement within the building or due to the warping of the frames as the building sinks.

The next image shows movement between the slab joints to a distance of approximately 60mm. Repairs had been carried out previously however the movement continued thereafter.

Crack in a stone floor

 

The image to the below shows substantial stepped cracking down to the floor slab level, which is an indication that the wall is pulling in different directions. Based on information we received from a structural engineer the site is located in a high risk area for coal mining, which is a possible cause for the subsidence.

Subsidence hero

What effect does subsidence have on the building’s operation?

If subsidence occurs beneath a business structure, it must be addressed quickly and effectively to avoid any revenue loss and associated costs to the owner or occupier. The loss is frequently substantially more than the cost of repair. Sloping floors can be disruptive for machinery and similar operations which can slow down productivity. To ensure there is no risk to the business or the staff and to keep a safe working environment action must be taken as soon as it has been identified.

How to prevent subsidence?

Whilst not all subsidence can be prevented, a few measures can be taken to ensure the building is protected and prevent longer term difficulties. Tree management is a crucial but easy solution to preventing subsidence. Depending on a number of factors such as the ground surface material, tree species and the tree location can determine whether a building is at risk of subsidence. We would recommend seeking professional advice from a tree specialist before any work is undertaken. As well as this, it is also a good idea to prevent any leaks by ensuring that the gutters, plumbing and pipework are all maintained can be a quick solution to a bigger problem.

What to do if subsidence occurs?

While identifying a fix for subsidence isn’t quick or easy, if the damage is only minor and can be easily determined then repairs can usually be carried out immediately.

Research has shown that tree roots are the cause of the majority of subsidence cases. This is due to the roots drawing in the moisture from the ground surface beneath the building, this issue can worsen when there is a dry period. In certain situations, the tree can be removed and this may solve the problem, however this could lead to heave. A tree specialist should always be contacted to provide advice regarding this issue.

In a worst case scenario, the building may need to be underpinned. This is a disruptive procedure and can be expensive with costs reaching £50,000 is certain circumstances. The Royal Institute of Chartered Surveyors (RICS) estimate that less than 10% of properties that are found to have subsidence need underpinning.

In the case of the above and if damage is severe then the movement of the building may need to be monitored over a longer period. This is to help structural engineers determine a longer term solution to help solve the issue.

Regardless of the fix your insurer should be contacted straight away so that they can arrange a survey and help you come to the right solution.

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

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What are the pros and cons of renting business premises?

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Business location and premises are vital factors of any commercial operation, and one of the key decisions business owners have to make is whether to rent the property or invest in purchasing the freehold. At Bradley-Mason LLP, our experienced team of Chartered Building Surveyors are on hand to provide commercial building surveys and a full range of property services across many sectors to help our clients make the right decision.

Buying a commercial property can have its advantages, though these may arguably be greater for businesses that have been established for a few years. A lease or rental agreement is often a simpler arrangement and, although it constitutes a financial liability, the lower set up costs may make this more attractive for smaller companies. Let’s take a closer look.

Renting business premises

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Recent start-ups and SMEs may find it harder to predict cashflow, meaning a shorter rental agreement or a flexible lease may be the best option to secure premises. The ideal agreement is one where the responsibility for repairs and renewals remains with the landlord. That way, the tenant’s dilapidations liabilities are kept to a minimum and the risk of being faced with large, unexpected bills at the end of the term is substantially reduced.

Bradley-Mason LLP can help with recording the property’s condition at the start of the term via a Schedule of Condition and we are proud to be one of the leading Dilapidation Survey specialists in the UK, with an experienced team available to advise both landlords and tenants.

The process of moving into rented premises is usually fairly straightforward, making a business relocation quicker and easier than mortgaging a commercial property. What’s more, there is no need to tie up large sums for a mortgage deposit to secure the property, and any decrease in property value won’t affect the balance sheet.

However, the pros must be weighed up against the cons, which can be significant, and include the following key considerations:

While the business will be sheltered from any fall in property values, it won’t benefit from any capital uplift either. The rent you pay will never offer you a return. In addition, rent increases can be both steep and unexpected, and they may be entirely out of your control. While there is always the option to up sticks and relocate if no acceptable solution can be negotiated with the landlord regarding rent increases or lease renewals, this is likely to be a highly inconvenient and costly pathway for the business.

Buying business premises

When it comes to investing in commercial property, lenders may exercise extreme caution when dealing with businesses that are not well established. Assuming a mortgage offer is made at all, it is highly likely that a larger deposit will be required and premium interest rates charged, as a way to mitigate the perceived lending risk. In any event, a deposit of 25-30% of the purchase price is not uncommon. Add to that stamp duty, legal fees and valuation fees and the upfront outlay may be substantial.

Variable mortgage rates can mean a sudden increase in payments without any protection. And, of course, we all know that property prices can go up as well as down. The worst case scenario is that you could find yourself in negative equity.

That said, buying the freehold does have some clear advantages, including the following points:

If the property increases in value, so does the value of your investment asset. Gone are the risks of unpalatable rent increases and periodic lease negotiations. Mortgages can be fixed for up to 10 years, enabling smoother cashflow projections than are possible if you are a tenant. What’s more, mortgage interest payments can be offset against your net profits, making your investment tax deductible.

As a freeholder, you can make alterations to the property as you wish (subject to planning regulations). At Bradley-Mason LLP, we have a dedicated project management team to advise on all aspects of a scheme, from the feasibility stage to the finished build. You can also sub-let part of the building without issue, which is usually not permitted when you are renting premises.

Prime commercial spaces tend to come with long leases of 15+ years, which is a long-term commitment that may not work for your business, especially if there is no workable break clause. As a freehold owner you have much greater flexibility and can choose to sell whenever you decide.

Contact us

Each business has its own unique set of requirements, which makes the decision to rent or buy entirely dependant on your individual circumstances. At Bradley-Mason LLP, our expert team of Commercial Chartered Surveyors and Building Consultants can provide valuable advice and guidance to businesses of all sizes and across all sectors. Why not contact the team and discuss your property requirements to see how we can help?

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

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What is cut edge corrosion? The common defect.

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What is cut edge corrosion?

Cut edge corrosion is a common defect that affects aging profiled metal roofs and is a defect we regularly find as building surveyors. From the factory, steel roof sheets are finished in a plastic based coating system which protects the steel from corrosion. The sheets are then cut into sizes to be transported and installed on site. This leaves exposed ends to the sheets which are not  protected from the weather. Once the roof sheets are installed, end, mid and side laps of the sheets are susceptible to moisture which is able to track beneath the coating through capillary action, and then begin to corrode the exposed  metal to the sheet ends and laps. This causes the coating to peel, further exposing the unprotected metal to the elements, this then corrodes, and the process repeats itself. If left untreated the condition of the affected roof sheets will continue to deteriorate and can eventually lead to corrosion through the surface, allowing water ingress.

Corrugated Roof with split

How to repair / treat cut edge corrosion?

Cut edge corrosion could be prevented by treating the cut edges with a protective coating system when the roof is installed, however in practice, this rarely happens. Depending on the extent of corrosion, cut edge corrosion can be treated with a liquid coating system. Methodologies and products differ slightly from each manufacturer. However in essence the process involves removing the corrosion and treating with an anti-corrosion primer. For a mid-laps, a gun applied sealant or butyl tape will be applied to seal the joints. The final coating will then be brush or roller applied to protect the cut edges from further corrosion. Most manufacturers offer at least a 10 year guarantee, making it a more cost effective option than re-roofing, particularly where a Tenant may only have a limited term remaining on their Lease.

Corrugated Roof with split and repair

Cut edge corrosion and dilapidations

Cut edge corrosion defects to roof sheets are included in dilapidations claims quite often. A dilapidations claim at Lease end to treat and repair cut edge corrosion can be a costly  item for the Tenant, even if they had a Schedule of Condition in place at the start of the Lease. This is because a Schedule of Condition alone does not protect the Tenant from the further natural deterioration of defects. Therefore, we always recommend that where cut edge corrosion is present at the start of a Lease that a Tenant should ask the Landlord to exclude liability for the further deterioration of the roof. Bradley-Mason LLP has a wealth of experience in dealing with dilapidations matters and producing Schedules of Condition, as well as specifying and project managing roof repair works on commercial buildings.

 

 

DISCLAIMER: This article is for general information only and not intended as advice. Each project has its own set of unique circumstances, all potential issues should be investigated by a surveyor on a case by case basis before making any decision.

 

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