‘Wherever your business sits within the supply chain, logistics will be a key consideration,’ says Jeremy Redfern, Partner in the commercial property team with QualitySolicitors Parkinson Wright. ‘While good transport links are a key requirement, it is important to remember that there are a range of other issues which could affect your commercial premises.’
Jeremy outlines the key legal points to consider in regard to the distribution logistics when looking at a new commercial property.
Restrictions on use
It is important to check that either the planning permission for the site already permits use for storage and distribution or that you or the landlord are likely to get permission for a change of use.
If you do need a change of use, your solicitor will recommend that you enter into an agreement for lease which is conditional on the necessary planning permission being obtained. This will give you and your landlord certainty that you are both committed to the lease, as long as the permission is granted. The other key aspect of the planning permission to consider is whether there are any restrictions which could limit your operations, such as fixed hours during which vehicles can come and go from the site or a limit on the size of vehicles allowed.
The other way your use of the site may be limited is if there are any restrictive covenants on the legal title. These will have been imposed to protect the interests of your neighbours, but if they date back some way into the past you may be able to have them modified or even removed. Alternatively, you may be able to take out insurance to cover the risk of someone trying to stop you carrying on your logistics business. Your solicitor will be able to advise you on the best option.
As well as looking at formal restrictions on use, you should also consider who your neighbours will be and whether the logistics activities arising from your business are likely to cause a nuisance to them. For example, if your site is close to a residential area or school, you may need to take more precautions to avoid nuisance from vehicle movements, noise, and emissions than if it is on an out-of-town industrial estate.
Access and servicing
You will have chosen a site close to road and possibly rail links, but your solicitor will also want to check that the property has adequate legal access rights. If it is on an estate, you will be granted rights over the estate roads in your lease as well as rights to use a servicing area next to your unit. There are a few points to look out for in the lease drafting.
The landlord will be obliged to keep these areas in repair, provide lighting and signage, and may also provide security, but you will have to contribute to the cost through your service charge. Your solicitor will check that the service charge provisions are reasonable and that you will not be charged more than your fair share of the costs. They will also be looking out for any rights for the landlord to alter access routes or service areas. While it is reasonable for the landlord to have some flexibility with the layout of an estate over time, it is important that they can make changes only if you are left with access and service areas that are no less convenient than those you were originally granted.
If it is important for your logistics operation to have a low carbon footprint you may want to use electric vehicles, so make sure that there are EV charging facilities in place or that you can get them installed.
Repair and alterations
The extent of your own repairing obligations will depend on whether you have a lease of a whole building, including the structure, or just a part of a larger building, so make sure you discuss this with your solicitor. You should also think about whether any alterations to the building are required, particularly if you need to install any sort of specialised equipment. The lease will limit the type of alterations you can make and even those which are permitted will still need the landlord’s consent. If you plan to install plant and machinery, you will need to check the load capacity of the building and its electricity supply.
Hazardous materials
If the nature of your intended business means you will need to store anything hazardous on site (either fuel or goods), you must make this clear to your landlord. Your solicitor can then check that the lease accurately reflects how you intend to operate from the site. You should also check that you have, or will be able to obtain, any necessary permissions or licences from the local authority or any other relevant regulator.
Future proofing
The logistics sector has changed significantly over the last few years and is likely to change again, so you should consider whether you need flexibility in the way you occupy premises in case your business needs change. Your solicitor may be able to negotiate rights to end the lease or give up part of the property early; or you may be able to get an option to take extra space in the future if your business goes well. If you have thought about future proofing at the outset and built it into your lease, you will have more certainty as your business develops.
How we can help
Getting the right site on the right terms could be the key to success for your business. Our team of experienced commercial property lawyers can guide you through the process and make sure you have asked all the right questions before you commit yourself.
For further information, please contact Jeremy Redfern or a member of the commercial property team on 01905 721600 or email worcester@parkinsonwright.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.