FRI Leases, Rent Reviews and Empty Rates

The lease structures that make commercial different

In a well-structured commercial letting the tenant insures, repairs and maintains the building, often on a lease of ten or fifteen years, which turns much of what residential landlords know on its head. This book explains the legal and financial machinery that makes commercial different. It centres on the lease and the Landlord and Tenant Act 1954 behind it, then explains why a commercial building is only worth what it can lawfully be used for. The contracts chapter sets out the lease terms that define what you are buying, including full repairing and insuring obligations and rent reviews. You will see the continuing legal duties you keep even when the tenant carries the repairs, and the particular sting of empty rates when a building is vacant. The tax chapter explains how commercial property is taxed differently from residential, and why the wrong structure is expensive to unwind. A process-based checklist and worked costings of common mistakes complete the book. Next in this series: “A Commercial Portfolio”.

What’s inside

• The legal framework in plain English
• Permissions, licensing and planning
• The contracts, and what must be inside them
• Insurance, safety and your legal duties
• Tax treatment and choosing a structure
• Your compliance checklist
• Getting this wrong: what it actually costs

Educational material only, not financial, legal or tax advice. Results are not typical and are not a guarantee of income. Freedom Property Academy LTD, registered in England and Wales.