Commercial Property Jargon Buster

Acquisition
The act of buying or obtaining a property.

Alterations
If alterations are listed within a lease contract, it is referring to how much the premises can be modified by a tenant, such as adding partition walls and redecorating. Tenants are usually required to return the premises to their original condition.

Alienation
Alienation is the official term for the transfer of property and possession of lands, or other things, from one person to another. An alienation clause within a lease or licence refers to a tenant’s ability to sublet, assign or share occupation.

Break clause
A term in a lease agreement that allows a lease to be cut short under certain circumstances. A break clause can be enforced by either the landlord or the tenant.

Building surveying
Building surveying involves assessing the quality of buildings, which can be either residential, public or commercial properties. Building surveyors examine the condition of buildings and advise what work should be done to improve them.

Dilapidations
Dilapidations are the associated potential costs that could be due to the landlord from a tenant at the end of the lease, to restore the property to its original pre-let condition.

Disposals
Assisting owners/landlords in the selling and letting of properties.

EPC
An Energy Performance Certificate (EPC) rates how energy efficient a building is. It’s graded from A to G (with ‘A’ being the most efficient) and can indicate what your running costs will equate to. Commercial properties must have a rating of E or above to be fit for sale.

Incentives
Incentives such as an initial rent-free period or a cash contribution to fit out the premises can be offered to potential tenants to encourage them to enter into a lease.

Lease advisory
Lease advisory matters include rent reviews, lease renewals, the operation of break clauses, valuations, and the negotiation of lease surrenders and restructures.

Lease renewal
The process when a tenant serves a request for a new lease to their landlord, anytime after their existing lease has expired.

Pre-acquisition survey
A survey undertaken by an investor to discover the lifecycle costs of the building they are interested in purchasing, to make them aware of any repairs and maintenance required prior to commitment.

Property management
Allowing a third party to manage your property for you - everything from tenant liaison and rent collection, to reactive and planned maintenance and insurance management.

Rateable value
Your business premises’ rateable value is calculated by the Valuation Office Agency, but this valuation may not always be accurate, so a commercial property consultant can help you challenge the valuation to get a fairer outcome.

Rent deposit
A deposit held by a landlord as security when a tenant takes a lease on a property. This is often released by the landlord when certain financial targets are met by the tenant.

Rent reviews
Rent reviews take place periodically to allow commercial rents to be adjusted to the current market level.

Service charge
Sometimes landlords need to charge an extra fee to cover the maintenance, repair and upkeep of the communal areas or facilities such as security, refuse collection and lift repairs.

Yielding up
“Yielding up” is the tenant’s obligation to return the property to its original condition at lease expiry.