Many leaseholders are unaware of the business cost savings which can be achieved on commercial property leases.

At the outset, when a business is contemplating new premises, the pressure is on and the focus is on the rent, the rent free period which may be offered by the landlord and the suitability of the property, alterations and fit-out budgets, timing of the move and the business risks.

During the lease, occupiers naturally focus on their own business, many do not consider that the property is theirs so maintenance expenditure can be reactive – “if the rain comes in then we will fix it but otherwise we will not spend money on the building”. Often a lease break is contemplated but the business imperatives are foremost and again little thought is given to the condition of the building and the leaseholder’s obligations towards the landlord.

At lease end, the business priority is either for growth and moving into newer and larger premises, co-ordinating a move, ensuring that there is adequate order book and business resources to continue to remain profitable. Alternatively, the agenda is a business reduction, heading into smaller premises or perhaps ceasing trading altogether and again the poor old building can be neglected.

With the correct professional advice at all stages financial protection can be built in and ultimately appreciable savings made.

Before signing the lease, whether it be for five, 15 years or more, it is vital to estimate maintenance commitment which may involve providing a new roof before the property is handed back to the landlord.

What will be your normal and reactive maintenance costs during your period of occupation?

If you neglect maintenance, what will be your exit costs at lease end or on operating the lease break?

Even if you do not neglect your maintenance, what will be your exit costs for reinstatement of the property by removal of your own fit out and alterations

By planning and accruing for these costs, savings can be made. During the lease – maintain the building as if it were your own (if this is what the lease requires).

However, be aware that there are some circumstances in which neglected maintenance can be justified and pay dividends. Beware of break clauses – they are a trap for the unwary – a business can end up paying a number of additional year’s rent just at a time when looking for savings by coming out of the lease.

Lease end is crunch time when good preparation pays off and good advice is essential.

Establish your exist strategy during the last 12 months of your occupation.

Consider all options:

• Do nothing?
• Do some work but not everything which you are obliged to?
• Fully comply with your lease?
• Reach a negotiated settlement with the landlord prior to lease end?
• Hand the property back and negotiate settlement after lease end?
• Do nothing at all and wait for the landlord to react?
• Stand firm even in the face of threat of litigation?

There is no stock solution, each situation must be considered on its own merits. Metcalfe Briggs Surveyors has made recent savings for clients in the following areas - Central London Offices (£600,000), Snooker Centre, Essex (£160,000), office in Ashford (£136,000), industrial estate, Gillingham (£489,000), industrial unit, Sevenoaks (£59,000), industrial unit, Tunbridge Wells (£27,000), industrial unit, Ashford (£72,000), industrial unit, Maidstone (£63,000), industrial Unit, Edenbridge (£57,000), industrial unit, Brixton (£75,000)