RICS and BRC launch new small-business retail lease
RICS has launched a new small business retail lease in an attempt to “inject fresh life into the British high street”. The lease, unveiled on 4 July to coincide with “Independents’ Day”, a celebration of independent retailing in the UK, has been developed by RICS and the British Retail Consortium and authored by Nick Darby at SNR Denton UK LLP.
RICS says the new lease has been devised in order to simplify the often complex and time-consuming process associated with commercial property leases. It will enable quicker occupation of retail premises available to let by small and medium-sized enterprises, at a time when the BRC’s latest figures show town-centre vacancy rates of 11.1%.
The lease is an easy-to-use eight-page proforma document that provides the tenant with fixed property costs and a clear picture of their responsibilities. It is intended to be used for leases of up to five years with no rent review. The lease offers “entirely flexible terms” for occupiers, including break clauses. RICS also notes that the costs of a long lease negotiation process will be cut significantly for both parties using this new lease.
There are two versions of the new lease, in response to industry feedback – one has security of tenure under the Landlord and Tenant Act 1954 and one does not. “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,” RICS notes.
Paul Bagust, RICS associate director, noted that in offering mutually beneficial terms to landlords and tenants in a flexible lease, the initiative was “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”.
BRC director of business Tom Ironside added that, as well as assisting individual retailers, the new lease would make it quicker and easier to get empty retail units back into use, “preventing them acting as a drag on the performance of an entire area”.
