Choosing the right commercial property

When choosing commercial property, it is essential to understand the legal obligations and restrictions that apply to your business property. These rules affect both owners and occupiers and will influence the suitability of any commercial premises for business, whether you are looking for business premises to rent or business premises to buy.

Planning permission and permitted use

Your commercial property must have the correct planning permission or use class for your type of business. If you intend to change how the property is used, extend it, or alter its layout, you may need to apply for new planning consent or building control approval.

Failing to comply with planning requirements can lead to enforcement action, so always check permitted use before committing to any commercial property for a small business or larger operation.

Building, fire and health and safety compliance

All commercial property must meet relevant building regulations and fire safety standards. You will need to carry out suitable fire risk assessments, maintain fire detection and alarm systems where required, and ensure that escape routes, emergency lighting and fire-fighting equipment are appropriate for your business premises.

You must also comply with health and safety law to protect employees, contractors and visitors, including providing safe access, adequate ventilation, lighting, welfare facilities and a generally safe working environment. See fire safety and risk assessment.

Business rates, stamp duty and other charges

Most business premises to rent or buy will attract business rates, based on the property’s rateable value and local rules. In many cases, stamp duty land tax (or the relevant property tax) is payable on commercial property purchases and some leases, so factor this into your budget alongside rent or mortgage payments. 

Clarify in advance whether the landlord or tenant is responsible for business rates, service charges and other recurring costs before you sign any agreement for commercial premises for business.

Landlord, tenant and lease obligations

If you occupy business premises to rent, the terms of your lease or licence will set out your rights and responsibilities. These may cover rent reviews, repairing obligations, service charges, use restrictions, alterations, subletting, break clauses and how and when the lease can be ended.

You should ensure that any lease for commercial real estate is clearly understood and, where possible, professionally reviewed so you know exactly what you are committing to over the term. See commercial property: landlord and tenant responsibilities.

Employer duties and workplace conditions

If you employ staff in your commercial property, you are responsible for their health, safety and welfare while at work. This includes providing suitable welfare facilities (such as toilets, washing facilities, drinking water and rest areas), a healthy indoor environment and safe systems of work.

You must identify and manage workplace risks, maintain equipment safely and ensure your business property is suitable for the number of people working there. See workplace welfare facilities and healthy working environment.

Accessibility and equality requirements

If you provide goods or services to the public, you must take reasonable steps to make your commercial premises for business accessible to disabled people. This may involve ramps or step-free access, appropriate signage, accessible toilets, suitable door widths or layout changes.

Considering accessibility early, when choosing commercial property, can save costs and reduce the risk of failing to meet equality and anti-discrimination duties. See disabled access and facilities in business premises.

Operating licences, restrictions and environmental controls

Certain types of business activity require licences or permits – for example, selling alcohol, handling specific waste types or operating some regulated services. There may also be conditions on when deliveries can take place, limits on noise levels, restrictions on emissions, and rules on waste storage and disposal. Before you choose business premises to buy or rent, check whether your activities will need additional permissions or be affected by local environmental or neighbourhood restrictions.

Insurance for business property and assets

Whatever commercial property you occupy, adequate insurance is essential. Common policies include buildings insurance (if you are responsible for the structure), contents and equipment insurance, public liability, employer’s liability and business interruption cover.

Check what the landlord insures, what you must insure yourself, and whether your chosen commercial property for a small business presents any special risks that need extra cover. See insurance: business property and assets.

Getting professional legal advice

Legal requirements around commercial real estate can be complex and may vary depending on location, sector and property type. Before signing a lease, purchase contract or licence, it is sensible to seek advice from a suitably qualified solicitor or business adviser experienced in commercial property. They can help you interpret legal documents, identify hidden risks and ensure the business property you choose is compliant and suitable for your plans. Choose a solicitor for your business.