I bought a garden flat last year ,which was a lease and not a share of the freehold. I was informed by the solicitor acting for me there was a covenant on the property .

But took a view at the time that the flat was in such a bad condition and the previous tenant had been thrown out by the courts a year previously.

The covenant states that all the lease holders have to agree to any work I do on my property.

Since I have bought the property he have bought the freehold and now are all joint freeholders.

There is a partially dug basement which I would like to extend and I would like to add a back extension, naturally everything I would do would be getting full planning permission from my local council.

But every time I email, or request a meeting everybody the leaseholders have a problem,

I just received an mail now stating they are refusing me permission to do any work.

I ave been doing my best to accommodate the first plans I offered to redo their communal staircase which is separate to mine, they refused that, which was the one leaseholders i
Fathers ideas,

Any ideas? Any advice at this time old be helpfully

Many thanks for your kind comments regarding the blog.

With regard to your question, the landlord does not have to exercise his option to terminate the lease by forfeiture. He can choose to allow the lease to continue and claim for the rent due under the lease on an ongoing basis until the end of the lease term.

The best option is to find someone willing to take an assgnment of the lease which will make them primarily liable for the rent. However, you will probably be asked to guarantee the rent if the new tenant defaulted, so not an absolute release of liability.

Alternatively, you could see whether the landlord will accept a one off payment to take a surrender of the lease, he could make a profit if he relets quickly.

Best of luck

John

We have a restrictive covernant on our property: We live on a large estate built by a large building Company in 1982, this building Company still exists.

We obtained planning permission to build a 4 bed detached house in our garden, but the orginial builder of the estate wanted us to pay them 60K to give their permission. This was out of our price range and they wouldn’t negioate, so planning expired and we didn’t build.

We now would like to build a large extension to our house as a single dwelling, as many owners have done on our estate, but fear for how much the bulders want, even though most others until sale haven’t obtained permission.
Our Covernant says:

1. Nothing shall be done or suffered on the Premises which shall be or grow to be an annoyance to any person in whom the benefit of any of the covernants contained in this Transfer shall at any time be vested:
2. Unless the consent in writing of the Vendor shall be first obtained
i the exterior appearance of the buldings walls fenses and other erections now on the Premises shall not hereafter be altered.
ii no additional buildings walls fences or other erections shall hereafter be constructed or maintained on the Premises
iii no building on the premises shall be used for any purpose save that of a private residence for a single household and the garage for the garaging of a private motor vehicle.

Nothing shall be done on the Premises which will be an alteration to or departure from the overall landscaping scheme for the state as a whole.

We would like to proceed but obtain permission, but again it wouldn’t be viable should they be asking for 1000′s, any advice would be greatful.

I am sorry to hear of the difficulty with your business.

If you have not given personal guarantees for the tenant’s covenants under the lease then the landlord will only be able to claim in the liquidation for any unpaid rent as an unsecured creditor of the company. Subject to the proviso below, you and your wife will not be personally liable.

Directors of companies, can however, become personally liable for company debt if they have been guilty of wrongful trading, which most often occurs when the directors have continued trading when the company is insolvent. When it comes to winding up your company, I strongly recommend that you seek the advice of an experienced Insolvency Practioner, if you need a recommendation, we can assist.

In terms of a sale of the business, if you sold the shares in your company, which is the cleanest way from your perspective, then you will need to ensure that the buyer pays to you a sum equivalent to the deposit, as the deposit will remain with the landlord. I suspect that if the sale of the business is by asset sale and your lease is assigned, the landlord will only agree to release your deposit if the new tenant replaces it.

In short, you will only get your deposit back if your buyer agrees to pay a sum equivalent to it, in addition to what they pay for the business.

I hope this helps, it would be a lot worse if you had given personal guarantees!

Regards

John

The dilemma we have is whether to proceed to planning permission or whether to remove the restrictive covenant first. Any planning application is likely to attract many objections based upon the restrictive covenant and we are concerned that this may result in rejection. Once an application has been rejected, we suspect it will be harder to re-apply.

We hoped that having the UK bank’s approval to remove the covenant would allow us to proceed with a Deed of Release but we are advised not (and that it is not necessary). The prospect of approaching the Lands Tribunal is not appealing, especially if it is not essential.

We your welcome your views on the way to proceed. Thank you.

Firstly, thanks for the very informative blog – most helpful.

Now for my question :0)

My wife and I have a new business and have been trading for about 6 months now, but it has become evident that we will most probably not be able to survive next winter (sales are extremely seasonal).

We are a ltd company and have a 12 year lease on the shop property with break clause at years 4 and 8.

If we liquidated the company in the autumn and ceased trading would we still be liable for rent payments? We have not given any personal guarantees in regards to the rent.

Also, if we somehow managed to sell the business to someone else how would transferring the lease work and would we get our deposit back?

Many thanks,
Ross