RICS launches free small business retail lease to boost ailing high streets6th July 2012

The RICS has launched a free small business retail lease to attract new and independent retailers into vacant high street space.

Developed in collaboration with the British Retail Consortium (BRC) and authored by Nick Darby, SNR Denton UK LLP, the lease, has been devised to simplify the often complex and time-consuming process associated with commercial property leases.

The RICS said that the new contract (which is freely available to download from the RICS website) will enable quicker occupation of retail premises by SMEs, helping to support the independent retail sector and stimulate the British high street at a time when latest figures from the BRC show town centre vacancy rates of 11.1 per cent.

Paul Bagust, RICS Associate Director, said: "In simplifying the leasing process for landlords and small business tenants, we hope to support SMEs and provide a boost to the British high street in a time of decline – thereby contributing to overall UK economic productivity. Moreover, by offering mutually beneficial terms to landlords and tenants in a flexible lease, we are directly addressing the principles of the Code for Leasing Business Premises - identified in the Portas Review as a key tool in tackling the high street’s decline.

The lease takes the form of an eight page proforma, giving the tenant fixed property costs and a clear picture of the responsibilities they are signing up to. Intended for leases of up to five years, it is a standalone short-term contract with no rent review. It offers entirely flexible terms for occupiers, including break clauses. Landlords will benefit from rental income on a previously unoccupied space that can then re-establish its viability in the market place. For both parties the costs of a long lease negotiation process are significantly reduced.

In response to industry feedback, two versions of the lease have been developed, one with security of tenure under the Landlord and Tenant Act 1954 and one without. Under the Act tenants have the right to renewal of the lease. In circumstances where this may not be appropriate landlords should state at the start of negotiations that the protection of the 1954 Act is to be excluded and encourage tenants to seek early advice as to the implications.

British Retail Consortium Director of Business, Tom Ironside said: "The high street is a much-loved institution but it can be a tough place to trade, with property costs a significant challenge for all. Negotiating the complicated and costly process of getting the first lease for a shop is a sizeable hurdle which our lease removes. Shockingly, more than 11 per cent of town centre properties are currently standing vacant. As well as assisting individual retailers this new lease will make it quicker and easier to get those empty units back into use, preventing them acting as a drag on the performance of an entire area."