Property & Land

 

Your Step By Step Guide To Renting Commercial Premises From The Council.

You wish to obtain suitable premises for your business. What is the next step?

Step 1 - Find out what property is available.
You can find out what vacant property South Tyneside Council has available online together with other useful links to find privately owned property . You can also consider approaching private agents who specialise in commercial premises and land who may be able to offer a greater selection.

The Council maintains a useful list of some of these agents which you can view online. This list may not be comprehensive and other agents can be contacted via Yellow Pages.  Top

Step 2 - Arrange to view a Property.
Having chosen a property or properties which are of interest to you and suitable for your purpose, arrange through Asset Management to view premises at a suitable time

Once you have seen the properties, decide which one is your preferred choice by assessing your needs.  Top

Step 3 - What are your needs?
Is the unit the size you need? Does it have sufficient office accommodation ? Is the production area the correct size for your business. You will need a minimum floor area dependent on the numbers you employ or the work that you intend to carry out.

Is it suitable for the type of work you will be doing? Will you need additional plant and equipment for your business ?

Are there any restrictions on the type of use that the property can be put to?

Do you have any special requirements including?

  1. Power requirements? All units have limited electrical supply which may not be sufficient for your proposed demand
  2. Are the doors wide and high enough for deliveries ? Industrial doors differ in height and width. Check your proposed units door is suitable
  3. Is the ceiling height sufficient ? Each units height may differ which may restrict use of fork lifts, etc. Check your proposed clear ceiling height
  4. Is it close to your suppliers ? What are your transport links
  5. Is the floor loading sufficient ? . Units may differ regarding strength of the concrete floor and the loading it can take. Please check the floor loading before it is intended that any large equipment is intended for the unit.
  6. Do you need specific security arrangements ? You may need a certain type of intruder alarm. This may be a requirement of your insurers. For any other physical security measure please discuss with the relevant surveyor
  7. Is the heating the right type? Most units have gas powered heaters located in the production area and offices. The heaters are not intended to be used for drying purposes.
  8. If your business generates many visitors, what is the access like? Is there sufficient car parking space ?
  9. What are the parking facilities like? Are there enough spaces for your type of business?
  10. Is it easy to get to for lorries delivering supplies?
  11. Is it easy to get on public transport for staff?
  12. Is the property restricted by "use category"? For example the Council does not support retail counters in industrial units though specialised trade counters may be allowed.
  13. How will I dispose of my waste ? You will be required under the Environmental Protection Act to dispose of your waste accordingly. You may do this through the Councils Cleansing Department or through a private company. You will not be able to store a skip outside your unit.

Once you think that you have found the right property, think again!  Top

Step 4 - Are there any restrictions ?

You will not be able to do the following in and around the unit :

  1. Store a skip outside the unit
  2. Use the forecourt to store plant, equipment, etc.
  3. Use the forecourt as part of your business.
  4. Abuse parking requirements
  5. Use the premises for any other purpose than is lawfully permitted.
  6. Allow waste to accumulate

Please check that they may be other restrictions relating to the unit for which you intend to occupy.  Top

Step 5 - What are the financial implications?

The financial outgoings will be a major consideration. Will you be able to afford the following:-

  1. Rent - the cost of using the premises. VAT may be charged on some of our estates. If you are not registered for VAT you cannot claim it back.
  2. Rates - make sure you know the actual cost of the rates payable, not just the rateable value.
  3. Service Charge - This is an extra rent that may be payable to the Council as Landlord. It usually covers such items as insurance, maintenance, electricity, heating, lighting of common parts and other services provided to you and other tenants by the Council, such as a security alarm.
  4. Gas, water, electricity, telephone - These costs will vary according to your use of the premises and the time of year.
  5. Statutory requirements - You will be required to ensure your premises complies with the relevant legislation. You will have to arrange at your expense the costs to service and maintain the councils gas appliances, electrical installation, fire alarm and emergency lighting amongst others.
  6. General repairs - Normally you will be responsible under the terms of the lease for general repairs to items listed in the lease. This may include windows, doors, shutters, toilet fittings, etc. Also the unit will be required to de decorated at certain regular intervals.
  7. Dilapidations - At the end of your term or sooner if you require to come out of the unit you will be responsible for the unit to be handed back to the Council in a good state of repair. There will be costs associated to this. See step 15 for further details
  8. Other costs associated with your business - Costs associated with your business may include your labor, plant, materials, waste disposal, etc.
  9. Surveyors fees - These may be payable at commencement, renewal and at the end of the lease.

Payment - Are the above charges payable weekly, monthly or quarterly? Are they payable in advance or in arrears?  Top

Step 6 - Are there any other considerations ?

Check out what other liabilities you will be responsible for.

Who is responsible for the repair and maintenance of the inside and/or outside of the property?

If you decide to take the premises you will be responsible for the Council's surveyors and legal costs and stamp duty in preparing the lease or tenancy.

You can also get advice from the RICS who publish a useful leaflet called "Thinking of Renting a Business Property". The RICS can be contacted by telephone on (0120) 7695 1535 or by email contactrics@rics.org.uk.  Top

Step 7 - Are there any grants available ?

You can also get advice on any availability of grants and other assistance offered to businesses by contacting Business Development on 0845 4603333 Top

Step 8 - Confirm your interest ?

You will need to talk to the surveyor involved to discuss terms of occupation. You will also need to fill in an application form. You can fill in this application form online

Details will be needed for the Council to take out financial references. These details include :

  • Your home address
  • The name of your bank/building society
  • The address of your bank/building society
  • The sort code of your bank/building society
  • Your bank/building society account number

If you are a new business you will need to provide a business plan. You can obtain help with preparing this from the Business Development Team on 0845 4603333

All of the above details are required to enable the Council to clarify whether you or your business are financially sound for the proposed agreement.  Top

Step 9 - Heads of terms

Once satisfactory references are obtained, the Council will send you Heads of Terms, on a subject to contract basis.

This is a letter which basically sets out the terms that will be included in your lease/tenancy agreement. Amongst other things it explains:-

  • How long the lease/tenancy agreement will be for
  • How much you will have to pay in rent
  • What you will be able to do in the property
  • What your obligations will be
  • What the Council's obligations will be as landlord

You are most welcome to discuss these terms with one of our surveyors however, it is advisable that you seek independent professional advice at this point regarding your proposed lease from a Solicitor and/or a Chartered Surveyor.

Once you accept the heads of terms please confirm this in writing.

At this stage neither side is "committed". The negotiations remain "subject to contract" and either side can, for whatever reason, withdraw from the negotiations.

However, should you wish to proceed and written confirmation is given by you the next step will result in either:-

  1. The grant of a licence to give you early occupation (this is followed by the grant of a tenancy agreement).
  2. The grant of a tenancy agreement effective from an agreed date.  Top

Step 10 - Before you move in

Now that you have accepted the "subject to contract" heads of terms and satisfactory references have been received, the Council will prepare the lease documentation or tenancy. Once these documents are signed by you and by a representative of the Council you will be given the keys to occupy.

Payment of all fees due is also required prior to release of keys.  Top

Step 11 - Moving in
Some services may require to be connected ( gas, water and electricity ). If the services are on then arrange for the accounts to be transferred into your name. Contact the relevant Building Surveyor who will discuss the services. You will be responsible for applying to the relevant authorities to arrange for all services to be switched on including electricity, water and telephone.

If you want services to be available from the day that you move in, remember to apply early!

You must take the property as it stands. Depending on the tenancy/lease terms that you have agreed to, you will have to put and/or keep the property in good repair and condition to the satisfaction of the Council's Surveyor. A Schedule of Condition may be attached to your copy of the tenancy agreement and this specifies the condition of the unit at the start of your occupation.

Usually the units appliances ( gas heaters & electrical installation ) should be tested prior to your occupation to ensure that the premises are in compliance with the relevant statutory requirements.  Top

Step 12 - Payment / business difficulties

If you have any problems with your payment liabilities or have any financial difficulties please inform the Council at the earliest opportunity. Call the surveyor who is responsible for the Estate to discuss the situation regarding your rent/service charge etc. to try and resolve any problems.  Top

Step 13 - Alterations to the premises

Sometimes a tenant may wish to alter premises. Landlord's consent must always be sought prior to altering any property though consent will not be unreasonably withheld. However, consent will only be granted subject to the submission of plans, all statutory permission being sought (planning consent and building regulation approval, etc.) and payment of a one-off surveyors fee.

You may be required to return the unit back to its original construction and remove the alterations.  Top

Step 14 - Vacating the premises

Your tenancy/lease will set out the terms under which you may vacate the premises.

The tenancy/lease will define the minimum period for which you must give written notice to the Council that you wish to vacate the premises. You will be obliged to comply with all the terms of your agreement until the end of this period. Unless notice is served you will remain indefinitely liable for all the terms of your tenancy/lease.

If your lease allows you to assign and/or sub-let the premises and you wish to do so, you must make a written application to the Council for approval. With this application you must include details of the proposed new tenant, such as:-

  • Proposed use
  • Financial details, as set out earlier, for the purpose of the Council taking our financial
    references

You must speak to the surveyor involved with the estate to discuss potential assignments or sub-lettings, as the Council's approval to the proposals is essential.

If the tenancy/lease stipulates an absolute bar on assignment and/or sub-letting then you may not do so.

Prior to vacating the premises, for whatever reason, you must pay all outstanding arrears.

The Council will carry out a Schedule of Dilapidations. The schedule will list all outstanding repairs required to the premises which are the tenant's responsibility and these must be carried out before you vacate the premises. If not, once the lease/tenancy has terminated you will not be able to access the premises to carry out work. In this case any outstanding works are costed and you will be charged for the repairs required.  Top

Step 15 - Schedule of dilapidations

Following your notification to vacate the unit in accordance with the lease. A Building Surveyor will visit the property and prepare a schedule of dilapidations. This is a list of repairs that must be carried out prior to you vacating.

Normally you will be responsible for all outgoings ( rent, rates, gas, electricity, etc. ) until the schedule is satisfactorily complete.

The schedule will normally request you to :

  1. Remove all your furniture, equipment etc.
  2. Clean out the unit
  3. Decorate the unit ( this may include ceiling, walls, floor, doors, windows, etc. )
  4. Repair any damage caused to the unit
  5. Require any tenants alterations to be removed and the unit returned to its original construction.
  6. Arrange for qualified contactors to test and service the gas installation, electrical installation, fire alarm and emergency lighting

You may wish to carry out some or all of the repairs at your expense or the Council can get the repairs carried out and recharge you accordingly.

On satisfactory completion of the dilapidations and on payment of all rents, fees, etc. you may hand back the unit to the Council.

We will need details of your service providers ( gas, water and electricity ) together with final readings which will enable the Council to maintain the unit.  Top

Step 16 - Complaints

If you have any complaints please contact the relevant officer who is responsible for your property who will endeavor to satisfy your complaint.

The Council has a complaints procedure if you are not satisfied with the outcome.