Michael Boardman and Associates : hints and tips page

Hints and Tips for Movers

When looking to move office there are a great many items to consider and carefully plan in order to ensure that the project works smoothly and profitably for your organisation.

Some of these are outlined below. MB&A specialises in optimising these aspects on behalf of its tenant clients as part of relocation package.

The greatest 'Tip' is that all projects should start with RESEARCH. Be it an acquisition, marketing and disposal project or a rent review. Research will provide the information that will ensure a smooth running of the project. We can access all relevant information and research needed for any property related project.

General Considerations

Aspects that have bearing on the physical search for property:

	Location
	Tenure (freehold or leasehold)
	Number of staff
	Growth and expansion plans for the future
	Layout (single floor or self contained building)
	Lease term (cost of move measured against commitment and growth plans)
	Image (style of building)
	Budget (this will have bearing on location, style, lease term)
	State of premises (open plan or fitted)
	Car Parking - is that an issue

Costs

Financial and lease considerations

	Rent Rental values vary across London depending on market conditions and location. We can provide up to date information on current rental rate ranges of all the London office market locations and a guide as to where we think rental values are going. This applies to freehold values also.
	VAT Can the tenant reclaim VAT and is the building under consideration elected for VAT payments on rent. In some instances (financial service and charity organisations) VAT cannot be re-claimed and non-elected buildings hold a great financial advantage over VAT elected options.
	Business Rates What is the Rateable Value and can any savings be made through empty rates or half rate concessions? Half rating concessions end from April 2008.
	Rent Review Provisions What are the conditions for rent review assessment should your lease include provisions for a review of the rent paid (usually after 5 years)? Do any alterations paid for by the tenant as part of your occupancy work against you at review? Are proposed assumptions at review fair?
	Alienation Rights What rights are in place to assign, sublet or surrender your leasehold interest. Are these onerously or fairly restricted within the lease? Will an assignment result in a long term legal liability through an Authorised Guarantee Agreement?
	Early Determination Rights Do early determination rights exist and on what terms? Penalties can be high for such rights but these may be worth considering under certain circumstances.
	Occupational Costs (other than rent) Service charges, insurance, utility costs, dilapidation/re-instatement costs, estate charges (if applicable). Always be wary of quoted service charges. What hidden charges exist such as additional insurance charges or personnel costs/fees?
	Fees and other costs Legal, consultancy, fitout designers installations, Stamp Duty Land Tax (SDLT), landlord and landlord legal and surveyor fees, furniture acquisition, moving contractors.
	Landlord and Tenant Act 1954 (as amended) Is the lease contracted 'within the Act' and hold security of tenure or not? This has important bearing should a tenant be looking at a long term strategy with legally held stability that runs past a lease expiry.

Timescale

	When to start looking
	How long will the project take to conclude
	How to dovetail exit with entrance to new premises
	Legal considerations

When going into a project we prepare and provide a proposed schedule to work to that includes an allocation for each element of the project. An example timeline/cost estimate is can be provided.

FAQ

1.	Why use an agent?
2.	Should we consider serviced offices?
3.	When should a landlord be notified of our intentions to move?
4.	What notices need to be provided in order to terminate or extend a lease?
5.	We have a rent review and break option occurring shortly. How do we know whether to break the lease and relocate or remain and fight a review?
6.	Our landlord is seeking a significantly increased rent at review, can we negotiate?
7.	How much will dilapidations cost me?
8.	What area should I allocate per person for my new office?
9.	Who should we use to design and implement the partitioning of our new offices?
10.	What is the difference between air cooling and air conditioning? How does a fan-coil system vary from a VAV (variable air volume) or VRV refrigerant system?
11.	What is a fully accessible raised floor?
12.	What is a FRI lease?
13.	What does 'Contracted Out' mean?
14.	What is an AGA?
15.	How much rent free should I negotiate for?
16.	What Use is appropriate for my occupancy? Is the space under consideration appropriate?
17.	I cannot reclaim VAT - is it possible to acquire offices that do not charge VAT with the rent?

Answers

1.	An agent provides you with instant access into a complicated marketplace with the necessary experience and insights to make it work to your benefit. A good agent will deliver concepts to you as they emerge, whilst negotiating to provide the best possible terms to suit you and your companies’ long term requirements. A good agent will be able to advise throughout the process of acquisition including liaising with your solicitors and fitout designers to provide a seamless process of acquisition and occupancy.
2.	Serviced offices provide an easy to acquire and occupy office environment with the added benefit of being able to expand or contract without hassle. The disadvantage is that that they are expensive. Very good options for small and expanding organisations or large corporate organisations expanding into new markets.
3.	There is no strict timetable to adhere to with regard to informing your landlord of your intentions unless you are acting on the terms of a tenant only or mutual option to determine within a lease in which case a 3, 6, 9 month or other term’s notice may be required. It will be important to ascertain exactly the terms of the break and whether it includes full repair and re-instatement or full payment of rents only in order to be fully actionable. We can advise on such aspects which will be clearly outlined in your lease. In the event of a lease expiry, whilst the Landlord and Tenant Act 1954 Part II (as amended) provisions do not lie down any specific timescale to adhere to it would be beneficial to let your landlord know of your intended relocation as soon as you have secured your new premises.
4.	The preparation and serving of notices on the termination or early determination of a protected lease (should rights exist) is of paramount importance. We strongly recommend discussing these with your solicitor should you be looking at relocating.
5.	We can provide insights into current rental values and, to a certain extent, fairly reliable projections for the short term future, subject to unforeseeable events occurring. We can advise on options open to you in respect of alternative office situations available as well as the likely outcome of a rent review at the same time.
6.	A revised rent proposal from a landlord can under most leases be contested. In the event of a failure to agree terms between landlord and tenant (or their advisors) then most leases will provide for a process of 3rd party intervention usually via the RICS in order to arbitrate between parties.
7.	Dilapidations and re-instatement are a major part of relocation. The accommodation that you occupy will require, under most leasehold provisions, to be re-instated back to the state that it was when you acquire it. Exceptions for this exist such as when the landlord is rebuilding the site or undertaking a major refurbishment. We can advise when appropriate on these aspects.
8.	This can vary with style of operation. A legal practice should allow up to 120 sq ft per person whereas a dealing operation tends to have a much closer knit arrangement of approx. 60-80 sq ft per person. Meeting rooms and other facilities will increase the area per person if enlarged.
9.	We have intensive experience of fit out designers and contractors. There are two main routes to follow being the design and build or the architectural project management route. We would happily advise on which is the best and who to approach, should this be required.
10.	Air conditioning or comfort cooling systems can be complicated and expensive to maintain. There is also a degree of form and function to consider. If heavily partitioned then a fan-coil system is likely to be preferred and if open plan then a VAV system. Comfort cooling tends to avoid air circulation which could be insufficient for your organisation.
11.	An accessible floor is a floor plate system designed to give full and easy access for the laying of underfloor cables throughout the office. Generally found with carpet tiles and floor boxes to facilitate easy access.
12.	A 'FRI' (or FR&I) lease is a Full Repairing and Insuring lease. This is a description of the obligations that the tenant holds in respect of the premises under the terms of the lease. This particular obligation is to maintain fully and to insure the premises for any loss if destroyed or damaged. In a multi-let building the landlord (or his agent) will manage and maintain the building and charge the tenants a service charge. Service charges are normally administered on a per sq ft pro rata basis on the net lettable floor area. Services charges can vary greatly.
13.	A 'contracted out' lease is one that, by mutual agreement, is not held under the governance of the Landlord and Tenant Act for procedures and compensation relating to lease termination. Most leases of under 10 years are contracted out in the current market.
14.	An AGA is an Authorised Guarantee Agreement. An AGA is the usual stipulation in a modern lease for the protection of a landlord against default by an incoming assignee of an assigned lease, by the assigning tenant. This vehicle was created by landlords after legislation attempted to remove residual liability from preceding occupiers who had assigned their interest to a third party.
15.	Under certain market conditions it is possible to negotiate financial assistance with a relocation when taking on a lease. This is never guaranteed and can be dependant on many factors such as market conditions, lease term, rent agreed, break options, tenant covenant strength, and lessor need to dispose.
16.	When considering options it is important to consider the Legal and the Authorised (or Permitted) Use for the office under consideration. The Legal Use relates to the User as described by the local planning authority whereas the Authorised (or Permitted) Use is that detailed within the lease. Generally these will match however it is important to check. Office Use is under the class B1. A common alternative is Educational Use, classed as D1. A lit of Use Class Orders can be found under our documents section. A change of Use can be applied for but can take over 8 weeks to acquire, subject to planning permission being granted.
17.	VAT is an important issue for a wide range of tenants. Buildings in London may or may not be elected for the payment of VAT depending on whether the landlord has made a suitable application of not. In areas where tenants may not be able to re-claim VAT such as the City some buildings exist where space can be acquired that does not attract VAT with the rent. These are becoming scarcer over time. We act for a number of charities and financial service companies and have found such accommodation and thereby saved 17.5% of the rent in un-reclaimable VAT.