Salon Lease Review Checklist

Detailed checklist of everything to review before signing a commercial salon lease

Salon Lease Review Checklist

This is a template - always read the linked guide first. BeautyKiln gives general information, not legal advice.

Signing a commercial lease is one of the biggest financial commitments you'll make. Go through every point on this list before you sign anything. If in doubt, pay for a solicitor to review it - it's worth every penny.

The Basics

• Property address: [ADDRESS]
• Landlord/agent name: [NAME]
• Lease start date: [DATE]
• Lease length: [YEARS] years
• Annual rent: £[AMOUNT] per year (£[AMOUNT] per month/quarter)
• Rent payment frequency: Monthly / Quarterly / Annually
• Deposit required: £[AMOUNT]
• Is there a rent-free period? Yes / No - if yes, how long? [PERIOD]

Lease Length and Break Clauses

• How long is the lease? (3, 5, 10 years?)
• Is there a break clause? (This lets you leave early - essential for a new business)
• When can you use the break clause? (e.g. after year 3 of a 5-year lease)
• How much notice do you need to give? (Usually 6 months)
• Are there conditions on the break clause? (e.g. you must be up to date on rent, no outstanding repairs)
• If there's no break clause, think very carefully - you could be locked in for the full term

Rent Reviews

• Is there a rent review clause? When does it apply?
• How is the new rent calculated? (Open market value, RPI, fixed increase?)
• Is the rent review upward-only? (This means it can go up but never down - try to avoid this)
• Can you challenge the reviewed rent?

What's Included

• Business rates - who pays? (Usually the tenant, but check)
• Building insurance - who pays? (Usually the landlord arranges it, but you pay via a service charge)
• Utilities - are they included or separate?
• Service charges - what do they cover and how much are they?
• Is there a cap on service charge increases?

Repairs and Maintenance

• Is it a full repairing lease (FRI)? (You're responsible for everything including the structure - common for whole buildings)
• Is it an internal repairing lease (IRI)? (You handle internal repairs, landlord handles structure and exterior - more common for units within a larger building)
• What condition is the property in now? (Get a schedule of condition attached to the lease - this protects you from paying for damage that was already there)
• Who is responsible for the roof, windows, external walls?
• Who is responsible for heating, plumbing, electrics?

Alterations

• Can you make alterations to the property? (Fit a salon, install basins, change the layout?)
• Do you need the landlord's written consent first?
• Does the lease say consent 'will not be unreasonably withheld'? (It should)
• Will you have to put everything back at the end of the lease? (This can be expensive)

Assignment and Subletting

• Can you assign the lease (transfer it to someone else if you sell the business)?
• Can you sublet part of the space? (e.g. rent a chair or room to another therapist)
• Does the landlord need to approve any sub-tenant?

Restrictions

• Are there opening hours restrictions?
• Are there restrictions on the type of business you can run?
• Is there a competitor restriction? (Does the landlord promise not to let a nearby unit to another salon?)
• Are there noise or odour restrictions? (Relevant for nail salons - ventilation)
• Signage - can you put up a sign? What type and size? Do you need planning permission?

Personal Guarantee

• Is the landlord asking for a personal guarantee? (This means if your business fails, you're personally liable for the remaining rent)
• Can you negotiate a cap on the personal guarantee? (e.g. 6 or 12 months' rent maximum)
• Can you offer a larger deposit instead of a personal guarantee?
• Get legal advice before signing any personal guarantee

Dilapidations

• What are your obligations at the end of the lease? (Dilapidations = the cost of putting the property back to its original condition)
• Is there a schedule of condition? (Photos and description of the property's state when you move in - get one)
• Could the dilapidations bill be significant? (It can run into thousands)

Red Flags - Walk Away If...

• No break clause on a lease longer than 3 years
• Upward-only rent reviews with no cap
• Full repairing lease on an old building with no schedule of condition
• Landlord won't allow a schedule of condition to be attached
• Uncapped personal guarantee
• Restrictions that prevent you subletting chair space
• No consent clause for alterations (or consent can be 'unreasonably' withheld)

Before You Sign

• Get a solicitor to review the lease (budget £500-£1,500 - it's worth it)
• Get a schedule of condition prepared and attached
• Visit the property at different times of day (check parking, footfall, noise)
• Talk to neighbouring businesses about the landlord
• Check what planning use class the property falls under
• Get written confirmation of any verbal promises the landlord or agent has made

Property: [ADDRESS] Reviewed by: [YOUR NAME] Date: [DATE] Solicitor: [SOLICITOR NAME AND FIRM]