Perhaps you are working in an industry that has been hit hard by the coronavirus, you have had to make large cut-backs with your workforce or perhaps you have come to realisation that home-working is the new way forward for your business.
Either way, we take a brief look at how you can face this challenge and speak to your landlord about making changes to your lease.
Do I Need Less Office Space?
Office space is mainly rented at a cost per square footage, so a good way of reducing costs is to only pay for the space that you actually need. If you have lost some of your workforce or are allowing people to work-from-home more regularly then reducing space may be a good option for your business. This is much easier to do when you rent floor space in a shared office or flexible serviced office. They may be able to move you to a different floor or part of the building if reducing space where you currently are is not viable.
Considerations: Reducing some square foot may seem like a simple decision to make but there are some things to consider. You need to make sure that this change will not just be short-term in case it is not so easy to increase your space in the future. For example, if you have a reduced workforce is it likely that you will be re-hiring once the economy has picked up again? Or if you have people working from home, is that going to work long-term? And what happens if you need the team all in the office at once? Another consideration to make is whether or not you will be able to safely comply with the government guidelines around social distancing if you were to reduce your floor space. At the time of writing, the guidelines are still that people should be working 2 metres apart wherever possible.
Moving to a Smaller Premises
If you have significantly changed the way your business operates then you may be considering moving to a smaller commercial unit or going from having your own office building to using a serviced / flexible workspace. You will need to carefully check your contract for where you are to see if you can exit your lease early or use a break-clause. Usually you will not be able to terminate your agreement and you may find yourself stuck in a contract – this is why it is always important to ensure that you have sufficient break clauses in place to allow you to exit or make variations as your business needs change.
Considerations: Moving workplaces takes a lot of time and focus away from running your business. Make sure that you are making the right decision and take into consideration the additional costs of moving and setting up in a new location. When entering into a new lease agreement, ensure that you get the terms looked over by a solicitor who specialises in commercial property law. This way you can have peace of mind that your agreement has some flexibility should these challenging times for businesses continue into 2021 and beyond.
Sub Leasing or Sharing Office Space
These difficult times have shown that businesses, landlords and tenants need to be creative and think outside of the box. It may be that another business might want to make use of space that you no longer need. This will need to be discussed and agreed with your commercial landlord. There are likely to be lots of conditions to you sharing premises with third parties and it is important to have clarity from all involved as to what expectations and responsibilities will be.
Ending Your Lease
If you have sadly come to the decision to wind up your business, you are scaling down or you no longer require any commercial space to work from then you will be looking to terminate and vacate. Unless you are near the end of your contract or coming up to a break-clause then you may have to wait or continue to pay your business rent until the agreed time-period ends.
Again, it is important to be certain of your decision and try to explore any other options before terminating your lease. Have you spoken to your landlord about a rent holiday? Can you negotiate your rent or reduce your space? Are there any other cost-cutting exercises you can do?
Expert Guidance
If you are facing some challenges with your business space and would like some guidance from an experienced commercial property lawyer, then please get in touch with our team who will be happy to assist you.
Call our office on 01256 84488, email enquiries@lambbrooks.com or speak to our online chat assistant who is available any time of day via our website.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.