Always Remember These Four Things When Letting A Commercial Property...

Taking out a commercial mortgage is not always quite so straight forward as many may believe. There are a few things that you need to think about beforehand, and in this article we look into the costs involved with entering into a commercial mortgage contract.

You must accept that this will be a fundamentally costly process for your business, though if you consider that the expenditure is an investment, it does make a lot more sense. You will have to put a considerable amount of business capital into the purchase of a commercial property. (typically you will need at least a 25 per cent deposit to be eligible for a commercial mortgage, a far higher percentage than in a normal mortgage). Alas, this is just the beginning of the expense, not the end. There are various other fees and charges that you will encounter when taking out a commercial mortgage or business loan. The purpose of this guide is to explain five of the most common fees and charges that are incurred when taking out a commercial mortgage to buy retail, manufacturing or office space.

Landlord Works: Prospective tenants will generally have several properties to choose from. So, the work that you are prepared to do on your property could be the difference between them signing your lease and a lease on another building.

When letting a commercial property you have to decide whether you are prepared to assist a prospective tenant by undertaking landlord work on the building. For example, the tenant may require kitchen or shower facilities to be installed, or need bicycle racks or allocated parking spaces.

Energy Performance Certificates: These days the law dictates that you must pay for and provide your tenants with an energy performance certificate (EPC). A commercial EPC can be costly, so you will need to keep this in mind. Depending on the building, this can cost a few hundred pounds.

Legal and Professional Fees: Buying a commercial property will also involve legal and professional fees. A solicitor will have to be employed to draw up a contract and to gather together all the relevant legal documents that are needed for a property to be bought. Other professional fees need to be taken into consideration such as those for insurance and for site surveying.

Disability Discrimination Act: Assessing he needs of people with disabilities and taking reasonable steps to ensure that disabled people have good quality access to a commercial property is one of your major responsibilities as a landlord. You are obliged by law to comply with the Disability Discrimination Act, particularly if your tenants plan to open up the premises to the general public.

Fees for Mortgage Advice: If you use a mortgage adviser to research the market and broke your commercial mortgage then you may incur fees for their services. Depending on your adviser, you may be able to agree for the fees to be paid to them direct from the lender by way of commission. The fees charged really do depend on the adviser so you would need to have a discussion about their remuneration.

The Dangers of Asbestos: You will need to have the building checked over by professionals to ensure that the property does not contain asbestos, as this has been deemed to be a dangerous and toxic substance. If any is found then you will need to ensure that any works are taken care of to ensure that it is not dangerous to anyone inside the building, and any surround areas.

Being a landlord, especially for commercial premises, is no easy job and there are many things that you need to take into consideration. It is imperative that you know your responsibilities and that you comply with laws and regulations which are put in place for everybody's safety.