Time for a change with legals

It is about time that we, as an industry, review the process of lease conveyancing. It is a paramount part to our industry yet seems to prolong and delay the possibility of job creation, rents for landlords and further business expansion. We are currently facing a lose-lose situation, one that results in law firms billing more fees and the combined frustration of both parties. 

As we move out of the pandemic, we have seen a huge shift in promoting new business and encouraging start-ups across the board, whether that’s a new F&B, retail, or leisure concept. There is a real drive to create bricks-and-mortar spaces, putting back the value in our high streets which is what our industry is all about, and it’s so exciting to see the passion and creativity filling our streets and cities every day. However, this is being constantly compromised.  

Leases are often written with overbearing, old-fashioned and archaic language which has no relevance to our society, and it has the potential to deter new and emerging businesses, particularly those led by entrepreneurs and young people who have only experienced a slice of what this industry has to offer. I had a quick look at how long the average lease completion process takes at Shelley Sandzer, from reviewing Heads of Terms to signed agreements, and I was shocked. It takes, on average, 16 weeks. That’s four months of delay – four months of which a business could be generating revenue, building a presence, and planning for further expansion. It’s quite ironic how we live in a digital age and expect the delivery of goods and services at the touch of a button, yet when it comes to legal processes, this sense of urgency is lost and puts us back to a place where prosperity is thwarted and people are alienated, particularly young and passionate business owners that will keep our dynamic industry growing. 

With delay comes an unwavering sense of apprehension, giving opportunity for either party to have second thoughts, consider better terms or go elsewhere with their business. This is not a healthy nor effective position to be in, especially following two years of uncertainty and insecurity. It’s important to look at how other countries manage their legal processes, and when we look across the pond at the US, they seem to have this process nailed. A document called an LOI (Letter of Intent) is used which acts as a preliminary commitment of one party to another, where each party can hammer out the broader and more complex areas before resolving the finer points. Although it is similar to Heads of Terms, it seems to be a very quick and efficient way of handling the transaction, removing delay and deferral which only leads to anxiety and prevention. 

I think it’s fair to say that this part of our industry needs to change. It’s been a tumultuous two years, and we have witnessed the value of this industry and should be doing everything we can to keep up the momentum and not be afraid to change areas which have the potential to harm the industry we’ve created. Maybe there is a digital solution to all this – we use apps for almost everything these days, so perhaps landlords and business owners could relish in this opportunity if it’s in their back pocket on an accessible device. I am in no way an expert on this, and my idea may not be a practical way to combat the problem, but it warrants some thought. One thing is for certain however, a more streamlined approach must be adopted.