This should include rules around late payments, noise and any damage to the property. These can be common causes for landlord and tenant disputes.
To determine a new tenant’s reliability, ask these questions before signing a lease.
1. Have you rented a commercial property before?
If they answer yes, see if you can visit their current premises. This will give you an idea of how they treat the property that they work in. Also, request references from current and previous commercial property landlords.
2. What are the reasons for your move?
People move to a new commercial property for many reasons. They could be expanding or changing location or trying to secure a more cost-effective rental agreement. If they’re leaving due to a landlord dispute, it might be a warning sign.
3. Have you ever been evicted or had problems with a landlord?
This isn’t the type of information that someone is likely to just offer up. Encourage them to be open by being direct and asking for an honest answer to this question. If they say yes, see if the tenant is forthcoming with an explanation.
4. When would you plan on moving in?
Find out if there is a concrete date. If your new tenant might delay their move date, you could have an empty property for an undefined amount of time. You should also ask whether they would have a security deposit and first month’s rent available by then. If they’re in a rush to move, you should also find out why in case there’s an issue where they are currently.
5. What is cash flow like?
Be upfront about the fact that you’ll need guaranteed payment by a certain date each month. Ensure that they’ll be able to afford to pay this every month, on time.
6. How long would you want the property for?
For a long-term rental income, ensure the tenant agrees to a multi-year lease instead of just a few months. If you prefer to review the property after 12 months, inform the tenant that the initial lease will be for that duration.
7. What do you plan on using the property for?
This is an extremely important question to ask. Firstly, ensure the commercial property is legally suitable for the tenant’s intended use. For example, an office space isn’t suitable for a welding workshop, and unsuitable properties can incur damage from industrial use.
8. Will you be bringing in specialist equipment?
If your tenant plans to install machinery or engage in activities that could damage the property, be aware of this in advance. You can then either prohibit these activities or designate safer areas for them.
9. Would you wish to make any changes to the property?
It’s surprising how often landlords neglect to ask, only for tenants to request partition changes after moving in. See whether this will be likely before the tenant moves in. Then you don’t have to disappoint them at the start of their tenancy if you’re not happy to permit any changes.
10. How many people will be working here?
This is an important question for considering wear and tear to the property, but also to its surroundings. If the property has limited shared parking, a high number of employees could cause problems.
11. Would you like to ask me anything?
Be prepared for any questions that a prospective tenant may want to ask you. Encourage them to be open with anything they’re uncertain about. Good communication at the start of the tenancy can lead to a strong landlord-tenant relationship.
How not to vet a prospective commercial property tenant
The worst thing you can do is rely on someone else’s recommendation for a good tenant. Unless it’s a valid reference from a current or previous landlord, research the tenant yourself to check they’re suitable.
Advice about letting a commercial property
For advice about letting your commercial property to new tenants, speak to a commercial property solicitor on 03456 365 365 or email enquiries@rotherabray.co.uk. We don’t just make sure that your lease agreement is watertight, we’ll help to guide you with general best practice too.
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice please contact us to get tailored advice specific to your circumstances from our qualified lawyers.
