Start Up Costs

Th1984

Hi All,

Looking for advice on legal fees initially regarding our startup retail business. We have secured 8K of funding from the government back start up loans scheme and have 2k cash of our own to invest. Alongside that i have extensive personal credit available on a 0% for 12 months basis to back initial stockholding.

We had accounted for all costs except the legal fees on our premises and have our first negotiation meeting with LL agents tomorrow.

Main two questions would be:

1) i have been quoted in the region of 1200 (inc VAT) for a solicitor to negotiate and complete a lease, is this a fair quote?

2) where i am expected to cover LL legal costs would this be a similar amount? if so this takes a huge amount of our capital, If it is a standard Law Society lease is a solicitor necessary?

it is worth noting that neither myself nor my wife have ever run a business before and we will be allocated a mentor once the funds have been issued right now we are a little lacking in information.

Thanks

Th1984

chalkie99

The solicitors fee doesn't seem particularly outrageous, for the rates solicitors usually charge. However more importantly, you should ensure your solicitor is an expert in commercial leases rather than one who may have dealt with family issues etc.

When I rented my first retail premises my solicitor went through the lease and raised several things some of which saved me an expense and others which caused an extra unexpected expense.

On a positive note they argued for the landlords to pay their own expenses which saved me some money. On the other hand, they very strongly recommended me to pay for my own structural survey of the premises as the standard lease made me responsible for their maintenance and repair.

The survey was an eye opener which revealed lots of hidden problems which would have bankrupted me had their existence not been written into the lease and my liability excluded.

So, my recommendations would be:-

• Don't skimp on your own solicitor, they may save your skin in the long run.
• Do make sure your solicitor is a commercial lease specialist.
• Try to barter for the landlords to pay their own legal costs (it's a regular "barter" option)
• Stump up the extra for a structural survey if necessary particularly if the building had any age to it.

I am assuming you have already spoken with an accountant and had someone go through your business plan to make sure you have included all the other start up costs such as waste contracts, electricity contracts, card terminals etc.?

paddyrg

What Chalkie says. Commercial leases, unlike domestic ones, have no consumer protection, it is entirely possible to sign a contract that ends up with you having to replace a roof at your own expense and unable to escape from the contract for a decade. You need to make sure your lawyer is better than the landlord's lawyer - they will represent your interests and do the hard-nosed bit of the bargaining for you. Any promises about fixes before you take it over etc need to be in the contract along with consequences if they're not done.