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Five Considerations for Charities When Taking on a Lease of Retail Premises

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Taking on a lease is a major commitment for charities - bringing a raft of obligations for trustees, who could find themselves personally liable. For this reason, it is vital that they understand and agree to all provisions.

document signingThe guidance below has been designed to help you to plan and manage the process effectively:

1. Allow flexibility - leases, especially for new ventures, should be negotiated to include break provisions to ensure an easy exit if things don't go to plan.

2. Draw up a Schedule of Condition - repair obligations, especially for older premises, should be limited by drawing up a schedule of condition, ideally prepared by a professional surveyor. This will help to avoid you being tripped up by dilapidations.

3. Establish how long the fit out will take - try and negotiate a rent free period equal to the time it will take to get the premises ready for opening as there will be no income generated by the premises in this time.

4. Budget for a service charge? - Commercial leases of premises that form part of wider buildings/estates will invariably include a service charge payable on top of the rent, the cost of which can be unpredictable. Try to obtain as much historic information as possible and seek to agree a fixed/capped figure if possible.

5. Assume nothing - Commercial leases will usually restrict many actions the tenant can take without the Landlord's consent, such as alterations that can be made to the premises and the signage that may be displayed. Seek to agree these at the outset to avoid having to do so later at your cost - and without a guarantee that consent will be forthcoming.

For more information contact James Alger on 0114 2521412 or email

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