Occupying Herefordshire Council property assets

This guide relates to the Council’s commercial units that the Council operates as a business and therefore engages commercial agents to negotiate, let and provide advice on its behalf. Maylord Orchards Centre operates in a similar manner where market values are actively sought but where social value and health and wellbeing purposes may be taken into account against rental value purposes by constituted community groups.

The guide is intended to help small local businesses, community and social enterprise organisations / charities who might not have taken responsibility for property assets before or have not realised what their responsibilities have been. This guide is not classed as advice and is generic in nature, meaning that not everything will apply for any given scenario.

The Council recommends that professional advice is always taken by organisations.

Tenancy at Will- allows short term access to an asset, very little notice needs to be given to vacate, no security of tenure.
Licence- allows access to a defined area of a property only which is usually not exclusive.
Lease- allows sole use of a part of an asset

All of these documents have legal implications and set out obligations on both parties that can be enforced.

NOTE: Charities, social enterprises and community organisations - ensure you are acting within the terms of your constitution and/or your governing document.

Express an interest in a vacant/ advertised unit via the appointed agent
If available, negotiate with the agent until terms agreed.
Council reviews recommendation from the agent and makes a decision
Heads of Terms agreed
Lease signed
Occupation
End of tenancy – either negotiate new lease if available or reinstate unit

To supplement the process above, you may be asked for financial checks or references and proof of ID.

Heads of Terms (HoT):

HoT set out the key terms of the proposed occupation, agreed in principle between the group / business and the landlord. These HoT assist solicitors to draft and negotiate the lease and cover items such as term/ use/ break clauses/ rent/ rent reviews/ service charges/ insurance / repairing obligations / works/ time. It is advisable to appoint an agent to agree HoT on your behalf.

Formal agreement:

It is advisable to appoint a commercial property solicitor once HoT agreed.

Costs:

Budget for these professional advice costs and build in a sufficient time element. You may also be liable for the landlord fees and costs.

Once terms are agreed and the agreement for you to occupy is signed, you will have responsibility for the asset from the date the lease is completed. You need to consider and budget for things such as (depending upon what you occupy and the arrangement):

Costs of getting the asset ready for you- any alterations/ building works you need to do?
Do you need any permissions, certificates or licences to operate (planning, building control, etc)
Running costs- set up utility accounts, broadband and phone, non-domestic rates
Insurances- buildings (usually provided by the landlord but recharged to you), contents, Public Liability, professional indemnity as examples
Maintenance (clearing gutters, repairs)
Property Compliance – you will be responsible for arranging and evidencing items such as servicing of fire alarms, extinguishers, boilers, intruder alarms, ventilation systems, legionella checks and risk assessment, asbestos survey and management risk assessment, amongst other things.
In addition, you will need to comply with health and safety legislation and guidance such as undertaking a fire risk assessment, fire alarm and emergency light testing, etc

Please note that even when you sign the tenancy agreement, occupation may not occur immediately. Only when the legal process is complete will access to the property will granted.

At the end of your tenancy, budget and discuss with the landlord as you may need to reinstate the unit / asset back to the layout it was before you took it over. Any alterations (such as building offices or stores) may have suited your purpose but they may not suit the next tenant and the landlord is entitled to ask you to remove them at your cost.

A dilapidations survey may be commissioned (funded by you) to highlight areas of work that are required at the end of the tenancy- for example if roof leaks have occurred, boilers or other plant and fixed equipment have not been maintained or serviced and the condition is poor and needs clearing or redecorating. A schedule of condition undertaken at the time of letting will assist this process.

The Council has a Talk Community offer accessible on this website or Community development guide - Talk Community Directory . In addition, there is support for local businesses here.

The Council wants businesses and local communities to thrive and has many ways to do so. Please use the websites above to signpost you to the relevant contacts.