New Business Premises (shop)

[d0nnyoz]

Hi
First time in this particular forum and feel pleased to be here!
Background: I run a small business from home and have done for the last 7 years. The business has become relatively successful and I now want to concentrate on making it a "fulltime" business. Recently, a small shop has become vacant in my village (like in most villages/towns!) and I feel this might be my opportunity to "go large", or at least take my business to the next level. I offer IT repairs (from phones to tablets to laptops/desktops).
Question: I have been in contact with the landlord who owns the shop (and the flat upstairs) and have told him I am interested in taking over the premises. The shop has been empty for nearly 12 months. The landlord has been fairly noncommittal to this point, although he has vaguely discussed a leasing deal (only verbally). The shop needed some work done to it (not least because the services were tied in with the flat upstairs) and this is going on right now. I visited the shop to see inside (although I do know the shop as I used it previously when it was a Post Office) and can see they have separated the services and have generally tidied up with new walls and floor. So we have got to the point where he has asked me to contact the council to apply for a "change of use". I did that and council have stated I need to apply for a change of use from A1 to mixed A1/B1, at a cost of £450 + VAT. Because we are not committed yet to going forward with the lease, I obviously don't want to fork out that sort of money when he could essentially 'pull the rug from under my feet'.
So the question is, is there some sort of Option Agreement available where he promises to lease the shop to me providing I can get the relevant factors in place to go forward with the lease, the change of use being one of them?

(As further background, I am trying to not get involved with a solicitor over this, partly due to costs [I did contact a solicitor and they quoted me £260/hour with a minimum charge of 4 hours- their estimation), and partly because I have two friends who held very, very senior positions in large corporations and who have offered to assist with the lease contract.)

[ploddertom]

There is a lot more to take into consideration besides the lease/rent & application for change of use. The landlord may insist you pay his legal fees. Will you have to pay business rates or will you come under the scheme where you would be exempt - this is another application rather than just a nod of the head. You will also need to get an electric contract otherwise you could end up paying expensive deemed or out of contract rates. Electric contracts are usually signed for a minimum of 12 months and sometimes more - can only be broken under certain circumstances. No doubt you will also need phone/broadband provision either landline or mobile. Then there is insurance both for for your premises/stock & Liability Insurance.

For electric I would organise your own, using a broker may mean going for a 3 year contract without realising it. Phone/broadband is easy to do both Vodafone & Plusnet have decent deals. Whatever you do do not listen to anyone who promises they can lower your business rates - the only thing that gets lowered is your bank balance. You will get bombarded with calls for electric, gas, publishing in the local police/fire/school calendars etc - worth investing in a call blocker or a True Call to filter them all out.

All in all be careful & good luck to you.

[d0nnyoz]

Thanks ploddertom
All of this has been thought about in my business plan. Don't worry, I know all about this and have looked at everything you've mentioned. As I say, I've got good backers in my friends and they are good at what they do, crossing every T and dotting every I.
I spoke to one of them today who advised me on this Option Agreement given the landlord 'seems' noncommittal right now. The landlord has not implied anything else is going on but I just need to protect myself going forward in this interim period.
I need some form of commitment from him before I start to pay out things for the shop because at any point he could easily go somewhere else after I spent money on the prep work!

(Further background: the landlord had almost sold the shop to another business but their mortgage fell through so I'm wary of the fact that something else might come along in the short term that he feels is a better offer and because there is nothing committed between us, he could easily walk away on another deal. That's what I'm trying to stop)

[d0nnyoz]

Just a follow-up, but I was wondering if this sort of agreement exists and where I could possibly get a template?

[des8]

So you are seeking a wording for a lease where the terms of a lease have been agreed but completion of the lease will not occur immediately. It needs to contain a wording for when the agreement is to be conditional upon the grant of planning consent for change of use. or whatever.
At the risk of being reported for advertising (sorry admin!)
Practical law have one (which you pay for) https://uk.practicallaw.thomsonreute...mp=pluk&bhcp=1
Or Lexis: https://www.lexisnexis.com/uk/lexisp...ial_Property_C
Or Simply docs: https://simply-docs.co.uk/Agreements...of-Use-Consent
Or get your solicitor to do the work

[d0nnyoz]

Thanks des8
What I really want is some sort of pre-lease agreement that offers me exclusive right to take the lease, for say 3 months (or whatever is mutually agreeable).
The issue I have is the landlord has asked me to apply for a change of use for the premises which will cost me £500. I obviously don't want to commit that sort of money or any other expenses without knowing I will definitely be taking over the shop.
Because the landlord seems noncommittal, I'm reluctant to start spending money on something there is no guarantee I will take over.

I am not using a solicitor as I spoke to one who stated their costs would be £260+VAT and would take a minimum of 4 hours!!
I have enough family and friends involved in this sort of work (agreements etc) to get this done through them (one of them is my wife's cousin who is a partner in Scotland's biggest law firm! He works in London so he is qualified both north and south of the border.)

[des8]

I think that your way forward is a lease conditional on obtaining the requisite planning permission for change of use, but discuss it with your OH's cousin.

[d0nnyoz]

Thanks all.
The builders have been at the shop for the past 4-6 weeks doing a lot of tidying up (and splitting the services from the upstairs flat) and although the scaffolding is still there, it looks pretty much finished. So I'll be making contact with the landlord again today to see how we can progress. He's bound to ask if I have done the change of use yet with the council but my response is going to be based on the above conversation - I'm not committing money till I know I have 'exclusivity' on the lease.