Moving to a new commercial space is exciting but it's essential to get the right advice to ensure it doesn't turn sour. If you are thinking of moving premises, getting experienced advice first can pay dividends. What can seem like insignificant side issues can, quietly, become bigger than anticipated. By taking correct and early advice, from an experienced building surveyor, tenants can stay properly protected against cost risk and business disruption. This is a big investment and you need to protect it. There are a number of issues to consider and your building surveyor will be your personal guide.
Exit from your Existing Premises
It is likely that you will have liability on your existing premises. The landlord will probably serve you with a Schedule of Dilapidations at the end of your lease. You can get ahead of this by reviewing your financial liabilities well in advance of lease expiry.
A good building surveyor can review this and plot an exit strategy for you to mitigate your financial liabilities. You will also need to know these obligations when planning your move, as these are part of the financial jigsaw puzzle of calculating the costs of your new home. You may have various defence options open to you and writing a cheque may not be the best move.
Review of New Premises
Before you get carried away thinking about furniture and interior design, take a step back and look at some of the checks necessary. Nice receptions and pretty floors are all very well, but what about the building you are moving into? Here are some questions to ask:
Does the air conditioning work properly?
What power supply is there?
Is the roof in good shape?
What factors may hit the service charge (for which you will have to pay a proportion)?
How old is the plant and machinery and will it survive the length of term of your lease?
Has the equipment in the building been properly maintained and is it working to its designed efficiency?
Can the building operate properly when it is exceptionally hot or cold outside?
Does it have sufficient ventilation/air changes?
What is the air quality like?
What type of cladding does it have?
Is there smoke detection in the voids and are fire breaks in place?
Remember – the answers to these questions need to be considered before you commit to the building, not after you have moved in and spent a small fortune on fitting it out. Workplace Design
As part of good design, you will need to review your space planning, make sure you have made good use of it, as you will be paying rent on every square foot of space. Consider: Environmental issues – does the building meet your firms environmental policy regarding energy efficiency, use of PV, solar heating, water etc
Social issues – does it support cycling to work, gender, faith etc
Agile & flexible working – Will it support ever evolving changes away from traditional practice
Technology and Infrastructure
The landlord’s letting agents may connect you with a fit-out contractor to help you plan and visualise your new premises, but there needs to be some due diligence and guidance to ensure that the contractor’s proposals are robust and priced correctly. Ask yourself: “is a design and build fit out the right approach, or would it be better to review a number of interior design options and retain control of the design and specification?”
Money
You need to consider how you will pay for the project. Many contractors like to be paid in advance when dealing directly with end users. This offers you little protection and could put you at considerable risk. A properly drafted contract ensures that only works completed on site are paid for. Furniture is a little different due to its bespoke off-site manufacture. The contract is tailored to protect both parties in the event of a dispute. The contractor’s proposal needs to be well detailed and not vague, this is essential for proper cost control.
Dealing with the New Lease
Is a Schedule of Condition necessary to restrict your repairing liabilities? You don’t want to inherit liability for somebody elses damage. Is there a package of landlord works which are to be undertaken prior to moving in? Somebody needs to review the specification to ensure it is suitable and good enough. It is good to monitor the landlord’s work to ensure this is undertaken properly. You will also need to deal with the landlord in securing landlord’s consent for any alterations.
The Works
Finally, you will need someone to act as contract administrator. The contract has a list of mechanisms for processes such as proper cost control, valuations, and the issue of certification for payment and completion. The contract is there to provide the rights and obligations to you and your contractor. It needs to be properly administered, especially if a dispute arises further down the line.
Better Protection
Sometimes it is only the contract administration services that building surveyors are asked to help out with, and unfortunately all of the milestones before this have been missed, resulting in unnecessary cost risk, planning risk and increased liabilities which could have been avoided. Early engagement of a building surveyor is essential to stay properly protected in what can sometimes prove to be a very complicated process.
Ian Tew works in the Building Consultancy and Project Management team at Knight Frank in Newcastle. He can be contacted at ian.tew@knightfrank.com 0191 594 5012.
