As businesses emerge from Lockdown and employees return to their desks, some organisations have taken the opportunity to review and renegotiate their property arrangements by entering into or surrendering leases and taking on larger or smaller office spaces.
In previous newsletters, we have focussed on the basic terms to consider in entering into and negotiating a Commercial Lease. In this article, we look at what happens when you have secured the property, signed the Lease and you are ready to move in. Are there any other matters you should think about before committing to the Lease?
What property services does a commercial business need?
What is becoming increasingly apparent is that Information Technology and the physical property needs of a business are interlinked. A commercial property without internet provision will provide little value for the modern business organisation whose needs are as closely aligned to data transmission as they are to face to face business meetings. For a business to operate successfully the physical space must function as a hub to the remote network and be able to efficiently serve the requirements of clients and employees alike.
What does the Lease include?
A Commercial Lease of part of a building will usually provide a tenant with heating, lighting, hot water, a connection to the basic utilities and access through common parts, lifts and stairways. And in most cases the right to connect into services such as gas, electricity and water utilities serving the property and any shared telecommunications network within the building.
What other rights (eg. telecommunications networking rights) are relevant for the modern tenant?
The office will provide the physical anchor point for the business teams and clients but will also increasingly operate to support a number of satellite remote working stations and provide visual communication networks to clients.
Before completion of the Lease the well-advised commercial tenant will therefore ensure that it has:
• Reserved sufficiently powerful internet access and cable service rights and connection rights to enable its required use and occupation of the Property;
• Co-ordinated its information technology team with its telecoms provider team and its Landlord’s management team;
• Any necessary legal consent or third-party rights to these arrangements.
What can go wrong?
A failure to carefully consider and deal with telecommunications requirements before completion of the Lease may result in substantial delays. This can often result where surveys of the building are required by each of the information technology team, the building management team, and the internet provider to procure agreement on the routing and siting of any telecoms apparatus. A failure to agree around these issues may result in costly delays and business disruption for an unprepared tenant. Further, if a wayleave (landlord third party consent to install cables) is necessary a tenant will be required to engage a lawyer to negotiate and agree on such consent on its behalf with each of the Landlord, the Internet Provider and any other third party whose consent is required to the arrangement. That will result in further unscheduled delays as these can be complex arrangements.
• Seek to agree on arrangements for telecommunications and sourcing and routing of Information Technology connections before completion of the Lease.
• Ensure that the relevant teams procure any necessary legal wayleave agreement and commencement dates to coincide with Lease commencement.
This can avoid costly disruption and delays where a leased property cannot be used for the purpose for which it is intended because of the necessary completion of complex and lengthy telecommunications works.
If you are planning to commence, renew or surrender a Commercial Lease, our property team would be delighted to help.