Can you return part of your premises before the rest?

Topic
Leaving business premises
Reading time
3 minutes
Last reviewed
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  1. Draw the proposed boundary
  2. Separate space released from commitments released
  3. Test a normal working day

A business may stop using an annex or one floor while work continues elsewhere. That can make a staged return worth discussing, but an unused area is not automatically a separately returnable part of the property.

Start with the business reason. Does releasing the area solve a real problem, such as a landlord's proposed works or a smaller continuing operation? Or would it leave the business paying similar costs while losing useful flexibility?

Draw the proposed boundary

Give the landlord and property advisers a plan identifying the proposed returned area and the area the business still needs. Explain the remaining activity, not just the square metres.

A fictional business proposes returning a rear workshop while keeping its office and dispatch room. The rear workshop also contains access to a shared service cupboard. Deliveries use a route across the same yard. The boundary discussion therefore involves more than an internal wall.

Record the questions beside the plan:

Subject Question to resolve
Area Exactly what would be returned, retained or shared?
Access How would each party reach its areas and necessary facilities?
Services Which services or controls cross the proposed boundary?
Work Would either party's planned activity affect the other's occupation?
Responsibility Who would control each area and deal with problems?
Costs What changes are actually proposed, and what would remain payable?

The relevant professionals should assess the legal and technical arrangement. The table does not establish permission to divide the building or change services.

Separate space released from commitments released

GOV.UK's business-property guidance explains that lease terms govern many responsibilities. Ask the property adviser whether the proposed arrangement changes the lease, creates another documented arrangement, or requires a different route. Do not assume returning a percentage of floor area removes the same percentage of rent or other obligations.

Put the confirmed effect into the premises overlap budget. Keep any proposed saving conditional until the adviser and relevant parties have confirmed it.

If the proposal is really to shrink the business permanently, first test whether closing an annex is enough. A partial property agreement cannot fix an operating plan that still needs the released space.

Test a normal working day

Follow a delivery, a staff arrival and a service visit through the proposed arrangement. Identify where the plan depends on access through the other party's area or a person being present. Ask the project team what could prevent the remaining business from working as proposed.

For an industrial estate, include the shared facilities and estate access arrangements. A change agreed inside the unit may still need coordination with the estate manager or other relevant parties.

Record when the arrangement would start and what would allow the remaining area to be returned. If the second date is provisional, say why and who must confirm it.

For equipment becoming surplus in the first area, UK Auction Group can receive an enquiry describing the staged business change. Identify which access and release dates are agreed and which remain part of the property discussion.

Return to Leaving business premises.

Sources

This guide is general information and education only. Legal, tax, employment and safety decisions may need a qualified adviser who knows your situation. Read the disclaimer.

Releasing surplus equipment?

UK Auction Group surveys the surplus, values it item by item and runs the sale around your operation, so the working site keeps working while the surplus is sold and collected.

Send a list of what you have, where it is and your deadline. Decisions that are still open can be included.

Surplus asset disposal after mergers and restructuring Contact UK Auction Group

Business Closure Guide is part of the UK Auction Group portfolio.

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