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Top 5 mistakes in leasing commercial property

Although experience as a residential tenant is something that many of us have, taking on a commercial lease can be somewhat different. Whilst the basic idea might be the same, there are different rights and responsibilities attributed to the tenant of a commercial property, which can make handling this type of lease quite difficult for anyone without experience. To ensure that you don’t waste time on unnecessary errors, here are the top five mistakes tenants make when leasing a commercial property:1. Not calculating the financial element properly. A commercial lease will usually have more financial demands than a residential one – including the requirement that the tenant pays for the insurance, as well as covering costs such as any service charges. Be smart and ask the landlord up front for a complete list of all the charges so that you know exactly how much is involved from the start.2. Not taking advice. Most professional organisations – such as the British Property Federation – emphasise the need for both landlords and tenants to take professional advice before entering into a new commercial lease. This will ensure that all parties completely understand the document they are signing, as well as making sure that there is nothing wrong with the essential documentation.3. Expect a rent review. Commercial landlords, like residential landlords, will want to periodically review the rent, however, many tenants make the mistake of assuming that rent will remain the same, particularly on a very long commercial lease. You can expect a rent review roughly every five years or so – if the lease is longer than five years – and any change in the rent should usually be based on what that rent would be worth on the open market.4. Seeing the landlord as the enemy. Cordial relations between a landlord and tenant can make all the difference to the overall experience. Common courtesies, such as keeping the landlord informed of any events that might hurt their interests, fulfilling proper notice periods in the lease, paying rent on time and raising any issues in a non-confrontational and reasonable manner are all key to making sure that the relationship continues to work on an ongoing basis – for both parties. Changes to the rent, insurance, building improvements or a planning application may all arise over the course of a tenancy and if these can be dealt with without conflict it makes everyone’s life easier.5. Assignment and subletting. Most leases will have provisions covering assignment and subletting, as these are the two ways in which a tenant can pass on its responsibilities to someone else. Assignment is where the rights under the lease are sold, given away or passed to another paid party, whilst subletting means a tenant remains a tenant but creates a sub version of the lease between themselves and a sub-tenant who will occupy the premises. In most cases, both subletting and assignment will require the landlord’s consent and some leases may prohibit subletting altogether. As a tenant it is important to check the lease for these provisions before you enter into any arrangements as you may be in breach of the lease if you don’t.Commercial tenancies are essential in business and it is not that difficult to avoid making any serious errors with yours. Bearing in mind the five situations listed above will ensure that you steer clear of making the most obvious mistakes.If you would like legal advice about any of these issues, or any other issues relating to commercial lease disputes, please contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Top 5 considerations when drafting a partnership agreement

One of the most fundamental elements of a new venture is establishing the nature of the relationship between those who are involved, as well as their relationship to the business. This is why a partnership agreement is one of the most important documents in the startup process. Here are five key considerations to bear in mind when you are drafting or reviewing a partnership agreement.1. Avoid ambiguity. A lack of certainty is one of the main reasons that disputes can arise later down the line so ensuring that every aspect of an agreement is clear – and in writing – sets the business off on the right foot to begin with. A typed, signed, dated document that lays out all the key terms of agreement between the partners is essential if the relationship is to be clear and fruitful.2. State the capital contributions. To a certain extent the amount of cash that partners put into a business will have significant bearing on their relationship with that business – and to each other. So, it is important to clearly state the capital contributions i.e. how much each partner is investing to get the business off the ground. It’s also a good idea to set out where additional funds will come from in situations where the startup capital isn’t enough, as well as clarifying more complex relationships, for example if one partner is providing most of the funding whilst the other is doing most of the day to day work.3. Profits. This is a key issue for any business so a solid partnership agreement must cover how profits are to be dealt with. This should include when – and how – the partners can take money out of the business, whether a certain minimum must remain at all times, whether there are to be salaries paid and whether money already invested by one or other partners is to be repaid.4. Disputes and decision making. When beginning a business relationship most people tend to view that relationship in a positive light, assuming cooperation will come as standard and issues will be worked through. However, the reality is not always like that, which is why it is crucial to include both procedures for dispute resolution, and information on the steps that are to be taken to make decisions – the latter may well prevent the former being necessary. How will decisions be made, particularly where partners don’t agree but a conclusion must still be reached? And if events do lead to a dispute how should this be resolved – include here details of preferred avenues of mediation and alternative dispute resolution.5. Leaving the partnership. As with any relationship, no one wants to consider the end at the beginning. However, in business this is a necessary practical step. What is the exit strategy if the relationship begins to crumble? Is the partnership to be dissolved or continue with one less partner? Setting the exit strategy out right at the beginning lessens the potential for acrimony and disputes if things do fall apart at the end.A solid partnership agreement will underpin any business and is a crucial part of a good beginning. Incorporating these considerations will give any partnership agreement a sturdy basis.If you would like clarification on any of the issues raised above, please feel free to contact Salim Mansoor at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Top 5 Tips For Landlords

Landlord and tenant should, in theory, be a fairly straightforward business relationship – the use of premises in return for monthly rent. However, there are numerous pitfalls that await landlords, particularly those who don’t have that much rental experience. Our landlord and tenant lawyers in East London have a great deal of experience in acting for a number of commercial landlords who have come to us for help to resolve disputes between them and their tenants. Here are five tips on how to avoid falling into the main pitfalls. 1. Take a professional approach from the start. Even if you are renting premises to someone you know, it is still a good idea to ensure that everything is clearly documented in writing. This will prevent disputes at a later stage and will ensure as far as possible the smooth running of the business relationship.  It is also recommended by the British Property Federation that professional advice is always taken when entering into a new relationship with a tenant – and that the tenant takes advice too – so that both parties know where they stand. 2. Make sure the tenant is in a position to pay the rent and costs before signing anything. Assessing a tenant’s ability to pay costs such as rent and service charges is an important part of the process and can prevent situations arising further down the line where there is unpaid rent or bills. Taking references is key here, from accountants, an old landlord, as well as any trade suppliers, and where the tenant is a limited company it’s a good idea to ask to see company accounts. A rent deposit of three to six months rent provides some coverage against loss if a tenant cannot pay, or damages the property and does not pay for the damage. However, if all the evidence points to the fact that the tenant may not be able to meet the costs then it may be preferable to find a different tenant. 3. Maintain the relationship. The British Property Federation puts great emphasis in its Code of Practice on the landlord and tenant dealing with eachother constructively, openly and honestly throughout the term. This includes promptly informing the other party if there are likely to be any difficulties fulfilling the lease and being considerate of actions that may have an impact on the other’s rights or business. 4. Insurance. It is usual for the tenant to pay the cost of insurance but either the tenant or the landlord can usually arrange the insurance (the lease should state who is responsible for this). Where a landlord is arranging the policy then terms should be competitive and if the tenant is a whole building tenant it is often also a good idea to allow them to influence the choice of policy if they want to. Whatever the situation, it is crucial that the terms of the chosen policy are made clear to the tenant from the start and where there is any material change to the terms this information also needs to be passed on. 5. Rent review. Most, if not all, commercial leases will contain a rent review clause that allows the rent to move – usually up. Changes to rent are a sensitive subject and it is generally preferable to link any increases in rental amounts to what is a market rent in order to ensure they are reasonable. Any rent review time limits, notice requirements, scheduled fixed increases, and the stated review periods should be noted and timetabled at the start of the lease to ensure steps are not missed that might invalidate a rent increase. Landlord and tenant relationships can be smooth sailing where attention is paid to the details. These five steps above will set you on the right road to ensuring that you fulfill your side of the contract and enjoy good ongoing tenant relationships. If you would like clarification on any of the issues raised above, please feel free to contact San Chima at This email address is being protected from spambots. You need JavaScript enabled to view it..  

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Considerations Arising In The Use of Social Media

Social media has taken the world by storm, in both a business and a personal context. More than a billion people now use Facebook, 220+ million use Twitter, and 225+ million use LinkedIn – and that’s not taking into account the numerous other different types of social media platforms, such as Vine and Instagram. There is no doubt that it has become central to our personal lives, as well as in a business context too – however, it is not without its risks. If you are going to use social media then there are a number of considerations to bear in mind.What are the risks?Have you ever wondered how Facebook’s market capitalisation got to more than $100.6bn? Whilst social networking sites might be free to use in terms of there being no fee, they actually take from us another very valuable commodity - information.In the era of ‘big data’ that we are entering personal information and data on digital habits is like gold dust and this can be gathered by a social networking site and sold on and processed without our knowledge. Not all social networking sites do this, but those that don’t will often use the information they gather for fairly intrusive targeted personal advertising instead.Social media is a very public forum. Even if you say something online and then regret it and delete it, there is no guarantee that it will have disappeared from the web altogether. It is accessible by anyone, from relatives and friends to work colleagues and your boss. It may feel as if you’re simply throwing words out into the black hole of the web, but the reality is that you may be affecting your chances of future employment, risking your current job or offending those close to you without realising it.No matter what kind of organisation you are, if you are using personal social media accounts for promotion of your causes/business then you are not relieved of data protection liability.Data protectionThe Data Protection Act 1998 enshrines the right of individuals to see the information that is being processed about them and introduces obligations on the organisations that are processing it. Individuals can see what is being processed about them by making a subject access request. However, the Act only applies in a business context and there is an exemption where an online forum is used only for domestic purposes. This will not apply where that forum is not used only for domestic purposes – so even one tweet or post that is non-domestic will mean the Act applies.How to reduce the risksBe sensible – this is the most obvious way to minimise the risks from your use of social media. Don’t post inflammatory comments, don’t give more information to social networking sites than is absolutely necessary and think about whether you’d want your parents/children to see a photo before you post it.Use the available controls – most social networking websites have privacy options, however a recent survey found that more than three quarters of us simply don’t use them, despite being concerned about online privacy.Check the privacy policy – this will tell you exactly what will happen to any information that you put into the site, as well as whether or not your data is being sold on anywhere and what will happen to it after it has been sold.What action can you take when something is already online?If something exists online that you really don’t want to be there then the first step is to approach the website administrator and ask for it to be taken down – if the post is a breach of the site’s acceptable use policy this shouldn’t normally be an issue. If this doesn’t work then you can contact the organisation that owns the site directly.Whilst social media seems to have encouraged us previously to take a rather reckless approach to our personal information, we are now starting to see a backlash against privacy intrusion. Although it is almost impossible to prevent your personal data being accessed, exercising caution in using social media sites seems to be a good way to start protecting ourselves.If you would like legal advice about any of these issues, or any other issues relating to terms and conditions of the use of websites or social media networks, please contact San Chima at +44 (0) 207 790 2000 or This email address is being protected from spambots. You need JavaScript enabled to view it.
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Death in Service benefits - Fox v British Airways

The case of Fox v British Airways plc concerned entitlement to death in service benefits where the recipient had died shortly after being dismissed for medical incapacity. Death in service benefits amounting to some £85,000 would have been paid to the deceased’s estate if he had still been employed at the time of his death. A claim for unfair dismissal and disability discrimination was launched by the father of the deceased as an attempt to obtain compensation for the loss of the death in service benefits.The factsMr Fox was employed by British Airways. He was dismissed in 2010 following a six-month absence from work due to an ongoing back condition, and as a result of having exhausted his sick pay entitlement. The reason for the dismissal was given as medical incapacity. Mr Fox’s condition was serious but not fatal. However, five days after he was dismissed he underwent an operation and three weeks later he died from complications.The claimThe claim for compensation for the loss of death in service benefits was brought by Mr Fox’s father, on the basis that if he had not been unfairly dismissed and discriminated against he would still have been employed and so his estate would have been entitled to the death in service benefits.The Employment Tribunal found that because the death in service benefits were not a benefit to Mr Fox but to his dependents, they would not form part of the calculation of his loss if the unfair dismissal and discrimination claims were successful. However, the Employment Appeals Tribunal found the opposite – that the benefits would form part of the calculation of loss.The Court of Appeal decision agreed with the Employment Appeals Tribunal. It was found that although Mr Fox had no claim to the death in service benefits in his own right, it was part of the value of his employment contract and so should be treated as ‘pecuniary loss’ to Mr Fox himself.On the matter of quantifying the loss of the benefit, the Court of Appeal stated that ‘other things being equal’ deciding the amount would depend on the cost of obtaining the equivalent death in service benefits in the market. However, because at this point Mr Fox was now deceased, this was not possible. As a result, if the claim for unfair dismissal and discrimination succeeded, the measure should be that Mr Fox’s dependents be put in the same position that they would have been in had he not been unfairly dismissed i.e. entitled to the £85,000 payout.The issue to note here for employers is that if an employee dies shortly after being dismissed there is the possibility of his or her estate recovering death in service benefits compensation, depending on the circumstances. Liability would need to be established and this can be tricky, particularly as the employee is deceased. However, as Mr Fox’s case shows this is possible and so is something that employers should be aware of.If you would like legal advice about any of these issues, or any other issues relating to death in service benefits or unfair dismissal, please contact San Chima at +44 (0) 207 790 2000 or This email address is being protected from spambots. You need JavaScript enabled to view it.
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