New RICS code to help businesses get fairer let agreements
Businesses in the West Midlands will soon be able to get fairer lease agreements, thanks to the Royal Institution of Chartered Surveyors’ (RICS) new requirements, the body has claimed.
The Code for Leasing Business Premises will ensure that businesses can gain fairer, more flexible leases by outlining the terms of a lease agreement for tenants, and what to do if their landlord wants to increase the rent by an amount they deem unfair.
It also provides advice for landlords on how to comply with standards to ensure they have a transparent lease.
Paul Bagust, RICS global property standards director, said the institute aims to address concerns over the inflexibility in commercial lease terms, while balancing the interests of both landlords and tenants.
“Property is likely to be the second highest business expense after wages, therefore signing a lease means that you are probably entering into one of the most significant financial commitments that your business will make,” he said.
“For small business in particular, the failure to negotiate and fully understand the terms of a lease can spell disaster. Professional advice is essential and this new code sets out mandatory requirements that will ensure fairness and transparency for all parties in lease negotiations and rent reviews.”
RICS collaborated with commercial property professionals and industry bodies, including British Property Federation, British Retail Consortium, Federation of Small Businesses and the Law Society, to design the recommendations.
Bagust said: “It was our intention with this new Code for Leasing to address concerns over, and the support and collaboration of these leading industry bodies was imperative in creating strong, impartial guidance that supports and protects both the commercial landlord and the business occupier.
“We’d welcome any feedback from property professionals and interested parties, as these mandatory requirements will not only serve to improve standards in the industry, but also raise more awareness of commercial property issues, especially among smaller businesses.”
