Alexandra Townsend-Wheeler, commercial property paralegal at Bircham Dyson Bell LLP is warning local authorities to seek advice prior to renting empty office space to small businesses in line with David Cameron's announcement.
The Prime Minister suggested that there are around 300 empty council owned buildings which could be rented at a reduced rate to SMEs, making better use of empty local authority buildings.
"In principal it's a fantastic idea and it is somewhat surprising that it's taken the public sector this long to catch up with the practice of other landlords, but in utilising this option councils must take every provision to ensure they are doing what's best in the taxpayers' interest," explains Alexandra.
"My initial advice would be to grant relatively short term leases which contain a landlord's option to determine the lease at one or more points during the term. This way, in today's uncertain market if there is a need to reclaim the building for council use, or a better option for taxpayers' money arises, the council will have more flexibility going forward.
"Councils need to spend a little to accumulate more in the long run. Taking advice on the best tenancy agreement terms is fundamental to making it work for all parties, but if they get it right, the potential savings are vast so it's certainly a big step in the right direction."
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