Heads of terms is a document that records the main terms of a lease agreement between a landlord and a tenant. The terms are usually prepared and negotiated by the landlord’s agent. Although heads of terms are not legally binding, it is important for the tenant to take time to understand the terms and the financial implications behind those terms before they start lease negotiations.
For so long Energy Performance Certificates (EPCs) were little more than coloured paperwork forming part of a conveyancing transaction. This is all set to change from 1 April 2018 with regulations that require commercial properties being leased to have a minimum EPC rating of E. Landlords that rent out properties with lower ratings could face fines of up to £150,000.
Most tenants will recognise the importance of lease terms relating to the amount of rent payable or the length of a lease, but the remaining provisions can be just as, if not more, important with potential ramifications on their business costs.
At the start of April the latest Government reform came into play with the intention of cooling the buy-to-let market, being an additional 3% payable on SDLT charges. The increase also affects those buying a second home or a holiday home however it is the buy-to-let market that it is anticipated will be affected most. So what is the alternative?
Regulations to establish a flood reinsurance scheme were made in November and came into immediate effect. Flood Re is the system preferred by The Association of British Insurers and the Government to ensure that affordable insurance against flood risk is available for home owners whose properties are considered to be at high risk of flooding. It is anticipated that the scheme will start business in April this year and the catastrophic floods which we saw over the Christmas period demonstrate that a workable scheme needs to be implemented as soon as possible.
Rachael Spalton and Victoria Sandberg of Longmores Solicitors’ commercial property team and Paul Raitt of Brasier Freeth Surveyors recently held a joint seminar on the subject of “Buying Or Leasing Business Premises; Pitfalls For The Unwary”.
Last month the Government announced changes to the planning regime to make permanent the controversial Permitted Development Right which allows the conversion of office premises to residential without having to obtain a full planning permission. The Permitted Development Right was introduced in May 2013 as a temporary measure until May 2016 but has now been extended indefinitely and forms part of the Government’s drive to deliver 1 million homes by 2020. Whilst the Permitted Development Right may only deliver a small proportion of the Government’s homes target, the change will no doubt be welcomed by developers.