Conventional leases:

Conventional leases typically run for a period of between 3 and 9 years. Any longer and stamp duty becomes payable.

The lessee is responsible for the rent of the premises and, for everything associated to them. So the lessee will be responsible for arranging for:

• the premises to be furnished and carpeted,
• the IT to be installed and networked,
• the telephones and broadband to be installed,
• the offices and windows to be cleaned,
• reception to be manned,
• obtaining quotes for all property related maintenance,
• entering into maintenance contracts for the air conditioning, fire alarms, emergency lighting and lifts (if not in a shared building where they are covered by service charges),
• calling in tradesmen for ongoing repairs to lights, door handles and locks, etc.,
• paying all property related bills,
• providing breakout areas for staff and the provision of tea, coffee, milk, etc.,
• dealing with security and confidential waste,

The amount of space required will be determined by the number of employees, the workspace required for them, the meeting space required and the size of the breakout area(s). This could mean that you are paying for space that is not fully utilised but required by your business to meet Customers and satisfy staff.

Conventional leases make it more difficult to expand or contract. You either have to sublet the area you no longer want or need, or you have to find a replacement tenant, so as to release you from your commitment. If you outgrow your premises, you have to find new larger ones and then either sublet or find a replacement for your old premises and, you have the upheaval of moving and going through the whole exercise again.