Starting a Business - The Advantages of Renting Premises Reading Answers

When you're starting out in a business, one of the initial decisions you will have to make is whether to buy or rent the premises in which you wish to conduct your business. Buying business premises is a big commitment and it's important to consider carefully whether renting is a better option. Renting can firstly provide more flexibility for your business as it grows. You are not locked into property ownership and you can usually agree with your landlord the length of the lease that you require, or have a break clause included. This will let you end your occupation (usually on a specific date) if, for instance, you want to relocate.

Financially, renting can make good business sense. Upfront charges for leasing premises are often relatively low, though you will have to provide a refundable deposit. But generally, renting ties up less to interest rate rises, although your rent may rise periodically as a result of rent reviews. Always check to see how rent is reviewed before you sign the lease.

There is also less potential for unexpected financial shocks - unless you wish to sell the remaining term on your lease to someone else, falls in property value will not affect you. Also, you will have no concerns about Capital Gains Tax, unless you decide to sell your lease for a premium. You may have less responsibility for the building if you rent rather than buy, although this will depend on the terms of your lease. You may have to look after maintenance inside the building, but external maintenance is more likely to be the responsibility of the landlord, particularly in multi- occupancy premises; you may, have to pay a service charge.

If you are a tenant in commercial property and employ staff, you must ensure the workplace meets a number of requirements under health and safety rules. These include ensuring the workplace temperature is appropriate, providing sufficient space, ventilation and lighting, providing suitable sanitation and washing facilities, providing drinking water, maintaining equipment and keeping the premises clean and free of waste. You must perform a risk assessment in the workplace and take steps to remove any hazards and potential risks. Your landlord will also have health and safety duties regarding the premises that you are renting and you should ensure that these responsibilities are being met.

If you rent commercial premises, the landlord must issue you with an Energy Performance Certificate (EPC). The EPC provides information on energy efficiency using A-G ratings. It also includes recommendations for improvement. Acting on the recommendations can help you cut energy consumption, save money on bills and help reduce carbon emissions. The advantage to a renter is that the landlord should pay for all or at least a part of any improvements that you feel will improve the energy performance of the building. These responsibilities though should be laid out in your rental contract

Whatever a landlord has put into a draft contract, the important thing is renting can also give you space for negotiation. You or your agent can negotiate any aspect of the lease, either at the start or, if you want to renew it, after the lease ends. The landlord will be keen to rent his/her property, as it will not bring him/her any income unoccupied, so don't be afraid to ask (or even insist) on things. Remember, you can always walk away and find a property of landlord that will give you what you want.