A new, free small business retail lease, designed to attract new and independent retailers into vacant high street space, has been launched by RICS (the Royal Institute of Chartered Surveyors).
The lease, developed in collaboration with the British Retail Consortium (BRC) and authored by Nick Darby, SNR Denton UK LLP, has been devised to simplify the often complex and time-consuming process associated with commercial property leases.
The new, freely available contract 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%, the RICS said.
BIS Minister Baroness Wilcox; Alan Collett, RICS president-elect; and BRC director of business, Tom Ironside, welcomed the introduction of this lease to the retail sector.
Paul Bagust, associate director, 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.”
Ironside, said: “The template lease will help the successful retailers of tomorrow take up their places in town centres across the country.
“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 takes the form of an easy-to-use eight page proforma, providing 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, it is a standalone short-term contract with no rent review. It offers entirely flexible terms for occupiers, including break clauses. Landlords will benefit from rental income on a previously unoccupied space that can then re-establish its viability in the market place. For both parties the costs of a long lease negotiation process are significantly reduced.
In response to industry feedback, two versions of the lease have been developed, 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 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.
To ensure the lease is understood and used correctly explanatory notes for occupiers, surveyors, lawyers and landlords will be published alongside the lease.
To freely download the lease and explanatory notes please visit www.rics.org/