Pitfalls of Moving Office in 2021

Step 1.

Congratulations! Your company has made it through 2020 - you got through the furlough scheme, survived Brexit and managed to work over your dodgy home internet connection for several months.

Survival secure (hopefully!), it's time to start looking at the future and what 2021 is going to hold for you and your team. One of the bigger questions - what to do with your elephant on the balance sheet and probably your second biggest outlay, your beautifully decorated, Smeg fridge incorporating, finance draining, mothballed office space.

Over the next few weeks I'm going to quickly run through some of the key things you need to know about getting out of your current contract, finding a better alternative for the new world we find ourselves in and making that place work for a team that now seems to want to work every other day from their home bed/office.

I should add - these are my opinions based on about 10 years in the industry and based on working primarily in Central London, I'm not always right, but I'd like to think more often right than wrong!

Getting out of your current space

Most companies will be on one of two types contract - a lease or a license agreement and both give you very different exit strategies. The first thing to do is to work out which you currently have - ways you can tell:

• If your contract length if over 2 years - chances are it's a lease
• If your contract is less than 15 pages long - chances are it's a license*
• If your contract mentioned things like dilapidations, the landlord and tenant act or alienation rights - chances are it's a lease*
• If your contract is 'all-in' (business rates, service charges and utilities included) - chances are it's a license*

*probably, I've seen examples of all of these that have gone the other way! It's always worth checking with a professional.

Getting out of a lease

Normally there are 4 exit routes from a lease:

1. End of term - pretty straightforward check the end date, a lease that is "outside of the act" will normally fall away and you do not need to hand in notice*
2. Break - a lot of leases will have a break clause written into them - this gives you the right to leave part way through the lease term. They normally require a good period of notice and are interpreted strictly - my advice is always get a solicitor to serve break notice, it is very easy to not to it perfectly and to get caught out.
3. Surrender - A landlord may offer you terms to walk away from your lease - Warning it will no come cheaply!
4. Alienation - subleasing or assigning your lease requires having the correct alienation rights in your lease and then finding someone to take it off your hands

*probably!

With each of these the main thing to bear in mind is that the wording of your lease is key - make a mistake and you could end up not being able to sublet and with a costly bill on your hands, or thinking you have served break notice right up to the day after you had the right to do so (don't laugh this had happened to someone I spoke to just 2 months ago).

I would always get professional help - speak to a surveyor, agent or property solicitor, they should be able to advise you on an exit strategy that works for your current lease - or at lease give you the bad news if there isn't one!

If anyone wants to talk through exiting their current lease I am always happy to have a chat.

All of the photo's used in this are spaces currently available - let me know if you'd like any more information.

Robin Thomas - 0203 597 6471 - [email protected]

Next time - License agreements and how to get out of them. Hint - not easily!