Our useful information gathers together all the information you need regarding your leasing arrangements with IPIF into one handy repository.
The steps to letting a unit
So you need to expand or move, you've been on the road and searched for properties on all the websites and have found your ideal IPIF property. What next?
Here's a straightforward guide to the IPIF leasing process:
1. ARRANGE TO VIEW THE PROPERTY INTERNALLY.
You might have had a good look from the outside and be happy with the location but will it definitely suit your business requirements? The eaves height may be too low, you may need to consider costs of additional fit-out or it may simply not have the right feel once you get inside.
- To arrange a viewing call IPIF on - 0800 804 8600. Our locally based agents will contact you to arrange a convenient time to view the property.
2. DISCUSS TERMS
So you've decided it's the property for you. Now you need to discuss the length of lease, the rent and other associated costs such as the service charge, Business Rates and insurance.
- Call IPIF on 0800 804 8600 for more information.
3. INFORMATION GATHERING
Due to the new Money Laundering Regulations, and because we don't necessarily know who you are we will ask you for a bit more information.
- If you are an established business - We'll need copies of the last 3 years audited company accounts so we can check your company's financial status or "covenant".
The general rule for IPIF, and most commercial Landlords is that your post tax profits must equal or exceed for 3 consecutive years the combined total annual rent, rates and service charge OR the net asset value of your company must equal or exceed 5 times the annual rent, rates and service charge for the unit you wish to let.
However a full financial appraisal will be carried out by Legal & General and we will confirm whether additional information is required or if we are able to proceed.
It may be that your accounts do not pass the appraisal and we will request a rent deposit, bank guarantee or Directors Sureties from you as additional security to the letting. This is to protect the Fund if your business fails.
- If you are a new business - You won't have any accounts or a proven financial track record and we will require a rent deposit, bank guarantee or Directors Sureties from you before we can proceed.
- Rent Deposit - The rent deposit will be held in an interest bearing account until your audited accounts pass the appraisal during the course of your tenancy, or until the end of your lease. When either of these events occurs you will be given back your deposit, with the interest that has accrued, provided you haven't defaulted on any of the rent payments and you have complied with all other lease terms.
- Service Charge & Insurance - We will provide you with full details of the likely service charge payment for your unit for the coming year and we'll also need to ask our insurers, AXA, for an insurance quote for your particular use and unit.
4. LEASE DOCUMENTATION
Once terms are agreed we'll put these into a written document (Heads of Terms) so that the Lease can be prepared and issued by our solicitors.
Find our standard terms under the "downloads" section on this page. Basically these tend to detail everything from the size of the unit, service charge and insurance estimates and timescales for completing the lease. The template is amended depending on the specific unit and to reflect terms that have been discussed.
We have three standard forms of lease, one of which will be prepared according to the terms agreed.
Do you want to use a solicitor?
On IPIF units where the annual rent is under £35,000 our solicitors will simply send out the final form of lease for you to sign once terms have been agreed.
We will not negotiate the lease terms once the lease document has been issued.
On leases where the annual rent is above £35,000 we will consider minor amendments but these should not be necessary because the standard leases, have been put together to save time and to be tenant friendly, especially when compared to other leases available in the market.
Feel free to telephone us to discuss any queries you may have.
- Print off and read Standard Lease
- Security of Tenure - Most of our leases are outside the security of tenure provisions of the Landlord & Tenant Act 1954. This means you will not have automatic rights to renew your lease when it expires. For more information please visit www.commercialleasecodees.co.uk.
5. ISSUING LEASE DOCUMENTATION
Terms have been agreed and you are keen to move in to your new unit. Before our solicitors will send out the lease, you will need to provide us with a cheque for Abortive Legal Costs.
What is this for?
- Abortive Legal Costs - It costs the Fund £500 to instruct our solicitors to review the Heads of terms, prepare the lease and send this out to you. This cheque is required should you decide for any reason to pull out of the transaction once terms have been agreed and we've issued instructions to our solicitors.
The cheque isn't cashed - it is held on account by us until the lease completes - then it is returned or destroyed.
The cheque should be made out to IPIF for the sum of £500 and provided to one of the team of IPIF, or the relevant local agent. As soon as this is received we will instruct solicitors.
Cheques should be sent to:
Lewis Callanan / Aaron Burns / Rachel Sharman / Liz Dunsmore
IPIF c/o JLL
30 Warwick Street
A timescale will have been agreed in the Heads of Terms and both parties should endeavour to stick to this. IPIF's solicitors can act quickly and we aim to get most leases completed within a month of terms being agreed, or sooner if agreed.
6. GETTING READY FOR COMPLETION
As soon as we instruct our solicitors you will need to ensure that once you receive the lease for signature everything is in place for completion.
- Rent Payment - Rent is paid quarterly in advance and your bank will explain how to set up a Standing Order mandate.
- Rent Deposits and other Monies - If you have to provide a rent deposit you will need to ensure you have full cleared funds in your account ready to transfer to our solicitors before completion can occur. Check the full amount is available, including VAT where payable.
- A Completion Statement showing sums due on completion can be provided in advance, on request.
- VAT - All of IPIF's estates are VAT Registered and VAT is payable on rent, service charge and insurance.
As soon as we have confirmation that the lease has completed - the keys will be released and you can move in to your new property.
Licence for Alterations - You may wish to make some alterations to your unit such as additional offices or another roller shutter door. Any alterations to the unit before, or during, your occupation MUST be approved by the Landlord in writing. If you let us have details of the works you want to do, we'll let you know whether this can be dealt with by a formal Letter Licence, or if the works are extensive by a formal Licence for Alterations.
All Licences are paid for by the tenant and depending on the type we will confirm the cost to you.
Any other questions?
Please ask one of the leasing team members at IPIF on 0800 804 8600 or email: firstname.lastname@example.org
Or write to us at:
30 Warwick Street
Property is likely to be one of the highest costs to your business, but it is essential to have accommodation! When you take on a property there are a number of costs you will need to factor in to your business plan so you can budget for the year.
All IPIF estates are Registered for VAT so you will need to add VAT at the prevailing rate onto the quoted rent for the amount payable.
2. SERVICE CHARGE
We actively manage all of our estates and each tenant pays a pro-rata service charge for a variety of benefits and items necessary for the safe and effective running of the estate. These can include litter picking, security, landscaping, and rubbish collection. We will provide you with details of the charge for your unit for the year and what it is you are paying for. VAT is also payable on the service charge.
IPIF has all of their estates insured by AXA. The Fund pays the insurance premium for the whole estate and charges the individual tenants back for the insurance cost of each unit.
4. INFORMATION GATHERING
Due to the new Money Laundering Regulations, and because we do not necessarily know who you are we will ask you for a bit more information. We require details from you of how you propose to use your unit so that we can obtain a quote from AXA and once we have this you will be provided with details of the quote.
The general rule for IPIF, and most commercial Landlords, is that your post tax profits must equal or exceed for 3 consecutive years the combined total annual rent, rates and service charge OR the net asset value of your company must equal or exceed 5 times the annual rent, rates and service charge for the unit you wish to let. However a full financial appraisal will be carried out by Legal & General and we will confirm whether additional information is required or if we are able to proceed.
When you have occupied, AXA will carry out an insurance survey, usually once a year, to check you are using the premises as you stated so they can check the quote they have provided is correct. The quote may be subject to change if the survey reveals that the unit is not being used as you have stated.
5. BUSINESS RATES
Every 5 years a government agency called the Valuation Office revalue all commercial property in the UK. The latest revaluation was in 2015. It is obligatory to pay them Business Rates for occupying commercial property be this an office, a shop or a warehouse. We will provide you with details of the current Rateable Value (RV) together with the current Uniform Business Rate (UBR). The UBR is the multiplier that gives you an indication of the likely rates payable for your unit.
For 2018/2019 the UBR is 49.3p in the £.
E.g. 2018 RV - £25,000 x UBR 49.3p = £12,325
So your likely Rates Payable for the unit would be £12,325 for the coming year.
*Tenants should make enquiries with the Business Rates department at their Local Council or check the Valuation Office website.