Unless you have been in business before, prior to taking possession of the shop, most landlords will require you to pay a deposit of six months’ rent (plus VAT if the landlord is VAT registered) in addition to the first quarter’s rent. If you are going to beVAT registered you will be able to claim all the VAT back but remember to include it in your setting up budget as it must be paid in advance.
The British Property Federation (BPF), which represents the UK property industry, has been campaigning for flexible leases and a fairer rents regime. As a result, there is beginning to be a move in rental payments from quarterly to monthly in advance. The BPF is encouraging landlords to sign up to its Commercial Landlords Accreditation Scheme (CLAS), which highlights landlords committed to offering the best service. Landlords can sign up to it via www.clascheme.org.uk.This should be raised with any prospective landlord as part of your lease negotiations. Flexibility has always been possible if the landlord is desperate to find new tenants, such as during an economic downturn, but even on my current shop, the lease of which was negotiated prior to the credit crunch of 2007, I negotiated six weeks’ rent free to help with the fitting out. All fitting out was done within two weeks and I had four weeks rent free to earn the first quarter’s rent.
