Taking on new premises is a major decision. The lease you sign sets costs, risks, and flexibility for years. Below is a straightforward checklist for businesses in Northern Ireland.
1. Heads of Terms: lock in clarity before the lawyers start drafting
Why it matters: Clear, well-scoped Heads of Terms (HoTs) save weeks later.
Capture in HoTs: parties, premises, term, rent, rent-review pattern (upward-only usually in NI), break options (who/when/how), repairing standard (see FRI below), service charge caps, permitted use, alienation (assignment/sublet), landlord/tenant works, and incentives.
Tip: Make break clauses truly usable. Vague “no breaches” conditions can make a break ineffective. Specify any compliance conditions narrowly (e.g., payment of principal rent only, returning keys, giving vacant possession).
2. Term, renewal rights, and ‘security of tenure’
In NI, qualifying business tenants have automatic renewal rights under the Business Tenancies (NI) Order 1996, unless the landlord can rely on set grounds like redevelopment or breaches. Compensation may apply if the landlord opposes on specific grounds.
Action step: Discuss the possible options a landlord has to refuse a Lease renewal with your Solicitor to see if any our likely applicable to your circumstances.
3. Rent, rates, service charge and VAT: model the total occupancy cost
- Base rent plus rent reviews (method and timing)
- Business rates: Check net asset value (NAV); estimate term costs under Rates (NI) Order 1977 (often agents will publicise the expected Rates figure in their brochures)
- Service charge: Request historical accounts, budget; consider caps/exclusions for capital items.
- Insurance: Confirm insurer, excesses, terrorism cover, uninsured risks.
- VAT/TOGC: Check landlord’s VAT position to see if they have waived the usual VAT exemption for the premises
Quick win: Build a 5–10 year cashflow—project rent, estimate rates, include service charge, account for insurance, fit-out cost, and possible dilapidations to test affordability.
4. Repairs, condition and full liabilities
Most NI leases are FRI (which stands for Full Repairing and Insuring). Without safeguards, you risk inheriting defects.
- Action: Hire a surveyor for a building survey before agreeing lease terms. Use the report to guide negotiations.
- Agree and Attach a Schedule of Condition in the Lease to avoid upgrading beyond starting condition.
- For multi-let: Landlord should maintain structure and common parts with fair service charge.
Dilapidations: Identify likely end-of-term claims. Negotiate fit-out reinstatement and cap if possible.
5. Use, planning and compliance
- Permitted use must match planning and your future plans. For diversification, ask for wider use clauses in the Lease.
- If needing planning/change of use, check Planning Act (NI) 2011 for timing impacts.
- Building Regulations (NI) 2012 (and 2024 updates) and fire safety rules apply to any works you may carry out.
- EPC: Confirm Energy Performance Certificate rating; some projects or funding need minimum standards.
Tip: Require landlord’s fit-out consent in a set timeframe, not to be unreasonably withheld. Clarify who secures and pays for statutory consents.
6. Funding and lender requirements
If borrowing:
- Action: Confirm your solicitor is on lender’s panel before instructing.
- Action: Check mortgage offer expiry. Align project and legal timelines accordingly.
- Action step: Identify lender-required protections (assignability, insurance, rent-review) and ensure these are added to HoT’s early to avoid renegotiation.
7. Assignment, subletting and group flexibility
Alienation clauses set out if you can assign or sublet either partially or at all.
- Assignment: landlord’s consent (not unreasonably withheld)
- Sublet: open-market rent, outside security of tenure, strict terms
Action: On alienation, check for restrictions on restructuring/disposal. Propose changes to keep flexibility.
8. SDLT, timing and completion mechanics
SDLT: Stamp Duty Land Tax applies to NI leases by NPV (net present value) of rent/premium. Factor payment deadlines into your cashflow schedule.
Completion: Use checklist—signed leases, deposit deeds, licences, insurance evidence, registrations. Track progress for timely completion.
9. Governance, signatures and who’s on the hook
Ensure the correct entity signs. Directors must know obligations (including personal guarantees). For special purpose vehicles (SPVs), align approvals and filings with governance timelines, especially for trading in both regions.
10. Process and professional standards: how NI conveyancers work
NI property solicitors follow Law Society NI standards—conflict checks, AML (anti-money laundering), KYC (know your customer), and clear fees. While the Home Charter Scheme is for homes, commercial work has the same commitment to communication and client protection. Expect:
- Written terms and costs information
- Clear reporting on title (where appropriate), searches and lease risks.
- Proactive liaison with agents, lenders and the other side to keep the matter moving.
How we can help
At Allsopp Campbell Rainey, we advise landlords, tenants, and investors on property matters throughout Northern Ireland. Our team:
- Protect against FRI and dilapidations exposure. Use schedules, caps, and sensible drafting.
- Map planning, building-control and EPC duties into your programme.
- Coordinate lender requirements so funding and lease negotiations run in parallel.
- Deliver pragmatic, plain-English advice that keeps your transaction on track.
Thinking about a new lease, renewal or relocation in NI? Talk to Allsopp Campbell Rainey before you sign—a short chat could save costs and boost flexibility long-term.
This article is general guidance only and not legal advice. Specific transactions and risks vary; seek tailored advice for your own circumstances.