Will the new RICS code help?
The RICS has recently introduced a new professional statement called the Code for Leasing Business Premises 2020. This took effect from the 1st September, compliance is mandatory for all Chartered Surveyors, and RICS regulated firms.
The new Code endeavours to promote “constructive and collaborative” lease negotiations between landlords and tenants, requiring detailed Heads of Terms to be produced and interestingly requires landlords to advise potential tenants of the existence of the Code and recommend that professional advice is taken.
As an agent who has specialised in representing tenants for over 15 years, I have always been surprised that so many occupiers do not take professional advice when agreeing leases. Perhaps it is because we tend to own our own homes or just a desire to avoid a fee, but leases are generally long-term commitments and documents where tenants make pages of promises to landlords which can affect their business for many years.
Companies use an auditor for their accounts, a solicitors for legal matters but often do not use a surveyor to protect their interests when acquiring a property. Virtually all landlords - who are often experienced property organisations - are still represented by a surveyor.
A solicitors is always instructed to deal with the draft documents and due diligence but at this stage the property has already been identified and the terms agreed. They are rarely party to the preceding negotiations and compromises, which may have been made to the agreed Heads of Terms or the specific property to be leased. "Google Street View" is no substitute for an active knowledge of the property.
I have been fortunate over the years to work with many excellent solicitors who fully embrace the support a surveyor can offer when agreeing legal documents. Both professions offer different strengths which together usually provide the tenants with a better package of terms and a lease which reflects the building to be occupied.
With increased uncertainty in the office market, it has never been more important to ensure the right property is occupied on a lease that works for the business now and into the future. With the new Code in place, perhaps more occupiers will seek advice when entering these commitments but I suspect there will remain a hesitancy from some.
The key will be to explain the services, benefits and costs of a surveyor to occupiers who have never used our services before.
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