Eddisons wins place on new advisory services framework for NHS

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We continue to expand our footprint in the public sector after securing a place on a new two-year Government procurement framework that will enable the firm to provide property-related services to the NHS.

The new NHS Shared Business Services (SBS) Consultancy and Advisory Services for Health Framework launched in March and will see NHS SBS partner with health service organisations across the country to increase efficiency, generate cost savings and improve corporate services.

The appointment is Eddisons’ fourth Government framework selection, with previously secured places on the Crown Commercial Services, schools buying organisation ESPO and Homes England procurement frameworks already generating significant work for the firm.

The latest framework appointment will enable the firm to provide property-related services in areas including capital asset strategy PFI, LIFT scheme reviews and hand backs and property consultancy and strategy.

Javid Patel, who heads our public sector team, said: “We have recently launched a suite of boutique consultancy services that are helping to drive efficiency and improvements for clients across the public sector.

“These include transformative AI tech that provides site feasibility appraisals in a matter of hours, and our PFI discovery services, which have been really successful in helping public sector clients to unwrap PFI schemes for smooth hand-back and negotiated settlements.”

The firm also recently launched its Infrastructure and decarbonisation services and has been appointed by Bradford City Council to carry out feasibility studies into developing solar firms at two sites in the borough.

“Our appointment on this latest Government procurement framework underlines Eddisons’ continued investment in our services to the public sector, helping us improve our access to the market.” said Mr Patel.

Understanding commercial rent review disputes and the Calderbank Offer

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Understanding commercial rent review disputes and the Calderbank Offer

 

In the course of commercial property letting, it is sometimes inevitable that a dispute may arise regarding the rent – either from the side of the landlord or the tenant. We examine the most famous rent dispute in an effort to understand how such disagreements can be resolved.

What is a Calderbank Offer?

A Calderbank Offer is an offer made ‘without prejudice, save as to costs’ in order to settle a dispute without incurring extra costs and the possibility of a full trial. The term stems from a divorce case in 1975 in which the judge decided that in a case of litigation, where the winning party has refused an earlier settlement, the losing party may present the details of the offer as evidence towards costs.

The implications this has in commercial property rent disputes are that if the winner of such a dispute is awarded less costs than was previously offered, the losing party may be able to pay a reduced amount of costs to the winning party.

How does this affect commercial property rent review disputes?

Rent reviews can be a bone of contention between landlord and tenant. They typically take place every three to five years – historically this period of time was seven or 14 years. However, with the shorter terms of modern commercial leases, usually between 10 and 15 years, rent reviews now occur more frequently.

The rent review clause in the lease will set out when the reviews will take place and how the new figure will be arrived at, what procedure will be followed and how any disputes, if any, will be dealt with. The most common method of recalculating a commercial rent is revaluation in the open market.

The Royal Institution of Chartered Surveyors (RICS) publishes a voluntary Code for Leasing Business Premises in England and Wales which aims to promote the values of fairness and negotiating commercial leases on the basis of informed choices, for both landlords and tenants.

The review will be based on the open market value of similar properties, on similar leases, in the local area. In some cases, the lease will stipulate that the rent will be increased, ‘upwards only’ which allows the landlord to increase it by the agreed amount. However, if, during the course of his or her research, the tenant discovers that the local market value is actually lower than the increase being asked for by the landlord, negotiations may take place.

This is where the Calderbank offer is of particular relevance to commercial property. If, during the course of negotiations, a tenant makes the landlord an offer of a reduced rent via a negotiator (usually an independent surveyor), in line with local market values and this is at first refused but then later accepted by the landlord, the tenant can use the first refusal both to argue their case and to claim any subsequent costs.

Commercial rent reviews can be fraught with difficulties and create an atmosphere of anxiety and disharmony between landlord and tenant. In order to avoid such a scenario it is essential that before the tenant signs the lease it is professionally examined to ensure that the clauses are fair and reasonable for both parties.

For advice and information on any aspect of commercial rent reviews, either from the perspective of a tenant or a landlord, contact the Eddisons team. Our highly-qualified, independent RICS surveyors have extensive and current experience on a wide range of matters relating to what can be a thorny issue.

 

Written by: Steven Jones on Wednesday 13/07/2016

 

Can you negotiate a commercial lease?

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Can you negotiate a commercial lease?

 

Whether you’re setting up in business for the first time or are looking to expand into larger premises, the process of negotiating a commercial lease can be fraught with difficulties. We look at the most important points to consider and ask whether it’s possible to negotiate a better deal for yourself.

Lease length

Depending on the nature of your business, the length of the lease you require will vary. Typically, retail leases extend to around 10 years, while office space leases begin at five. However, leases can also run from one or two years up to 25. If you’re interested in long-term stability for your business, negotiate the amount of time you feel is appropriate.

A break clause is also important to consider. These usually come into effect at around three to five years. If you do break before the agreed length of time of the full lease, you will still be liable to pay stamp duty, regardless of any break clauses.

Renewals

The Landlord and Tenant Act (1954) gives you the right to choose whether to have the right to automatically renew your least at its expiry, or to be excluded from such protection. If long-term security it important to you, make sure that you have a renewal right written into any contract you sign.

Rent

If your lease is longer than five years your landlord may require a rent review after this period. Some may even seek a review after as little as three years. Examine the lease carefully to see what terms the landlord imposes. Depending on market conditions, it may even be possible for you to negotiate the rent down rather than up!

Also consider asking for a rent free period at the start of your contract – this initial period is where most financial cost is incurred and a couple of months without the additional burden of rent may be the boost your business needs. Because he or she won’t have to pay business rates during this time, your landlord may look favourably on this suggestion too.

Repair costs and service charges

Carefully check the lease for ‘full repairing and insuring’ terms which may mean that you’re responsible for making extensive repairs, the benefit of which you may not fully see if your lease finishes soon after. Clearly, it’s important to maintain the property to a good standard but, in cases where the landlord is responsible for maintaining the exterior of the building, you should also be wary of incurring extra service charges they might want to pass on to you. Try to limit these to routine repairs and maintenance as opposed to structural repairs.

A commercial lease is a complex document and it’s vital that both tenant and landlord get it right. It should be clear and set out precise legally-binding obligations in order to achieve peace of mind for both parties. And while it’s possible that you can negotiate on your own behalf, if you have any doubts whatsoever, it’s always advisable to seek clarification and guidance about your legal position. That’s where our team of experts come into their own. Eddisons can offer you advice, interpretation and general guidance on all aspects of negotiating a commercial lease to help your business prosper from the outset.

A commercial lease is a complex document and it’s vital that both tenant and landlord get it right.

 

Written by: John Padgett on Friday 19/02/2016