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Where are virtual tenancies being used ?
We are increasingly seeing virtual tenancies being associated with science and innovation parks . Fledgling companies , especially in technology based sectors , do not necessarily need physical space ; but they do need the support and guidance offered by parks .
What do you need to consider ?
Tenants
• Credibility : the credibility of the landlord and the associations of the property are key considerations . Some properties have in the past been used for criminal or fraudulent activities ; some are in desirable locations such as central London or near respected institutions . Many science and innovation parks are associated with , or run by , universities and carry a certain prestige which can be beneficial .
• Cost : this will be a factor for any business to consider and will relate to the location of the property , the credibility of the landlord and the services provided .
• Services : some virtual tenancies operate solely as a mail drop , some allow use of hot desks or communal facilities , and some provide additional business support . Landlords
• Lease documentation needs to set out exactly what services the landlord is agreeing to provide to head off potential disputes .
• Landlords need to consider antimoney laundering regulations
• Reputation management : The actions of any tenant will reflect on the property and negative associations could damage a brand , or cause significant embarrassment for larger institutions .
Money Laundering Anti-money-laundering regulations require companies which offer virtual tenancies to register with HMRC . Virtual landlords must monitor who uses their property for mail drop or as a registered office , and must carry out identity checks .
This issue originally arose in the 1920 ’ s in the era of dead letter drops . These involved leaving letters in spare post boxes to be picked up by covert agents . While the days of such cloak and dagger activities have passed , virtual tenancies could be used as a cover for criminal activities and thus pose a potential money laundering risk . Proper vetting of these tenants is therefore essential . There are exemptions to these regulations e . g . for charities , however these are specific so advice should be sought .
This whistle-stop tour of virtual tenancies has outlined what they are , how they work , and some of the issues you would need to consider . Overall , for landlords , virtual tenancies are a good source of additional revenue that require little space and benefit from low administrative costs – thus they have the potential to generate a good profit margin . ■
Further enquiries may be directed to wrighthassall . co . uk
Editorial contributions are now invited for the summer issue – published in July 2017 . Our summer issue will review the York Conference and focus on environmental controls and the medical sector . Contributions from UKSPA members and tenants on growth stories and best practice case studies are also welcomed .
Copy deadline : Wednesday 7 June . Email your synopses to the editor : sarah . lawton @ futurenet . com
Journal and directory advertising
In addition to advertising space in Breakthrough , we also have space available in this year ’ s UKSPA Directory . Please contact David Parker to find out how these advertising opportunities can best serve your business objectives .
Tel : 01225 687267 david . parker @ futurnet . com
38 | UKSPA breakthrough | SPRING 2017