The Harrison Drury Blog

5 things a tenant should know about commercial leases

Office to lease

The majority of businesses need premises to operate from, whether they be for offices, workshops, factories or storage facilities. While some businesses own the premises they operate from, most occupy under a lease paying a market rent. But, there is more to a commercial lease than the payment of rent and the answers to the following commonly asked questions will give potential business tenants some useful guidance:-

1. Once I have signed the lease can I get out of it if my business suffers a downturn?

Leases are generally granted for a fixed period of years known as a term.  The lease term can only be ended early by the tenant if, prior to entering the lease the landlord has agreed that the tenant has an option to do so, or, the landlord later agrees to release the tenant from the lease before the term has expired.  If neither of these situations arise, and you cannot find an acceptable replacement tenant for the premises, you may well remain bound to pay the rent and comply with all other obligations until the end of the lease term, even if you have vacated the premises.

2. I know there will be rent to pay, but are there any other costs I may be responsible for under the lease?

If you are renting part of the landlord’s building such as an office block, you may also have a responsibility to contribute to the upkeep and maintenance of common parts of the whole building such as the roof and structural walls, or other things that are used in common with other occupiers of the landlord’s property, such as lifts or a reception area.  This is often referred to as service charge.  The tenant will also be responsible for the payment of the insurance premium for the premises to cover damage to the premises and also the loss of rent the landlord may suffer if the premises become unusable due to such damage.

There can be a cost if you want to transfer the lease, or sub-let part of the property to someone else, as you will usually need the landlord’s written permission, and the landlord can normally claim the cost of considering whether to agree to the transaction and also drafting and agreeing the form of the written permission.  Finally, you will usually be responsible for the business rates, utilities and any other outgoings in relation to the premises.

3. If I find that there are repairs required to the premises, am I right to think the landlord will sort them out?

Most commercial landlords not only seek to avoid any responsibility to carry out repairs to the premises, but will actually seek to put the responsibility for putting the property into repair on the tenant’s shoulders.  A tenant who agrees to a full repairing obligation can find himself with a repairing bill running into tens of thousands of pounds when the lease ends, despite the fact that the disrepair pre-dated the lease itself.  A well advised tenant will try to limit his repairing responsibility to keeping it in no worse state than it was at the date of the lease.  For this reason, it is highly recommended that an ingoing tenant obtains a survey to check and record the condition of the premises before they enter into a lease.

4. What happens if, after I have taken the lease, I discover there are problems relating to the premises that impact on my business?

The principle of “buyer beware” relates to a tenant taking a lease in the same way that it does to a purchaser buying a property, meaning that a tenant takes a property “warts and all” and he must satisfy himself that it is suitable both physically and legally for the use he intends.  The research into the property carried out by a good lawyer will reveal many things about the property, including whether the landlord actually has the power to grant the lease, any adverse rights that may affect it as well as any rights that benefit the property such as rights of way.   Lawyers can carry out a range of enquiries and searches to discover such things as planning permissions affecting the land, whether the property is connected to the public highway, whether there is any risk that the premises may be on contaminated land, whether the is a risk of subsidence due to historic mining in the area, whether the property is connected to mains utilities and a host of other information.

It is common for tenants who have not been represented by solicitors to enter a lease without finding out any of this information.  If a problem rears its head in such a case, say for instance the property does not have planning permission to use it for the tenant’s business, he will have no comeback against the landlord and the tenant will have to continue paying the rent despite the fact he may have a useless asset.

5. I’ve heard that a landlord can change the locks of my business premises if I am late paying the rent, is this true?

In short, yes.  The powers of a commercial landlord to deal with non-payment of rent are far-reaching.  Forfeiture is the procedure by which a landlord can terminate a lease and virtually all commercial leases will have a clause allowing the landlord to terminate the lease if the rent is unpaid for a specified number of days, usually somewhere between 14 -28.  Unlike their residential brethren, commercial landlords do not need a court order to retake possession of leased property if their right to forfeit the lease has arisen because of late payment of rent.  Landlords also have the right to send bailiffs in to seize the tenant’s goods and sell them if the rent is unpaid, but legislation will soon come into force to restrict this right.

The above answers cover some basic issues relating to commercial leases, but in reality only scratch the surface of what is a complicated topic.  If you have any queries relating to commercial leases please comment on this article and I will try and answer them.  I will also be posting further blogs on different aspects of commercial leases and commercial property in general and welcome and comments and contributions you may have.

744 Comments

By V Heath on October 27th, 2016

Hello,
I have am a tenent in a commercial property owned by a pension trust. I have been here for 4 yrs and the landlord has always been understanding regarding rent payments. But now my business has hit a bad patch losing a major contract. I July I asked for a meeting and explained the situation that we would not be able to make the rent and we should forfit our lease and close. He said not to panic and hold fast as something may turn up and he wasn’t too worried about the money. But now we are still in the same position and he has gone from that attitude to sending an email from his agent demanding the rent which now totals £4850! I have explained that I cannot raise this money immediately but he said that the trust is now making the decisions and they will instruct a solicitor which will cost me more. I have asked for a little extra time and I have offered a payment plan of £100 per month and offered to vacate the building. But none of these things are acceptable to the trust. The landlord originally said he would try to move me into a cheaper unit in the building but I have no written proof of this mneeting, only my emailed responses. They are very good at NOT putting things in writing! Can you advise what is most likely to happen next? We only had the demand from the agent on Wednesday and today they have said they will instruct solicitors. I am concerned bacause I am a director at a completely different business which they seem to be very interested in. Can they demand money from that business? I They have asked for it verbally.
Hope you can give me a clue what course they may take here?
Many thanks
Victoria

By mr gurtirathSingh on October 30th, 2016

I’m a garontor for my son who has not been able to pay the rent for 3 months forthe business and the landlord has put a for lease sign outside the shop and is saying that he is going to terminate the lease I have a Tennant that is intrested in the shop and he has contacted the landlord directly to take over the shop and pay the rent and leave me out can this be done as Iam the garontor do I not have the opportunity to transfer the lease to myself can you please advise me what I can do

By Beccy Patience on November 8th, 2016

Dear Mr Singh

Thank you for your comment.

Unfortunately, we are unable to provide any advice without sight of the Lease and associated documentation.

Should you wish for us to provide you with advice, we will be to do so on a fixed fee basis. If this of interest to you, please feel free to contact our property litigation team on 01772 258321 or email me at Rebecca.Patience@harrison-drury.com with further details and I will pass this on to them for consideration.

Kind regards

Beccy Patience

By antoni fliege on November 8th, 2016

I least a small commercial property the lease was for 3 year from April 2010 to April 2013 as far as I know I did not sign the lease I told the landlord verbally at the end of July 2016 this year that I would be moving out as soon as possible I started moving out bit by bit but input in the beginning of October she gave me one week to move everything out and make the property ready for somebody else to move in when I 11st moved into the property it had not been decorated and prepared for a me being I only had a week to move about the rest of my belongings I did what I could to decorate and bring it to a better state than when I moved in the landlord has sent me a bill £1600 for refurbishment £600 for replacing carpets and outside walls removing paint I would agree with the work the landlord carried out time booked out for it is a week is charging me an extra fall months rent he is saying that is loss of rent that he could have made where do I stand also do the lease agreement still stand been over the years out of date could you please advise me what to do
many thanks Tony

By Alex Walmsley on November 11th, 2016

Hi Tony, Thanks for your query.

Under the Landlord and Tenants Act 1954 (LTA 1954), where a lease has expired the terms will non the less continue to apply. This is known as ‘holding over’. The Lease usually continues until the Landlord or the tenant serve a formal notice.

As for the issue with the refurbishment you have carried out on the property; the original lease will need to be examined in order to see if there are any repairing obligations within it and whether the landlord may have a claim for dilapidations.

Should you wish for us to review the original lease in more detail and provide more comprehensive advice on your matter, we will be able to do so on a fixed fee basis. Please feel free to contact our property litigation team on 01772 258321 or email me at alex.walmsley@harrison-drury.com with further details and I will pass these on to the team for consideration and they will then get in touch with you.

Kind Regards

Alex Walmsley

By Deborah Mckenzie on November 13th, 2016

I own a farm in Scotland and let domestic properties on the farm to private tenants.
One tenant closed a business and asked to rent an agricultural shed as a temporary store for his shop’s goods.
He has since moved from my domestic rental property without leaving a forwarding address and is currently four months in arrears on rental for the barn. I need the barn back for farm use. I cannot write to him and he either ignores my phone calls or promises to visit, then does not turn up. I have warned him verbally by telephone that I will dispose of his goods.
Do I have the right to remove his goods from my barn and dispose of them?

By Miss Dar on November 15th, 2016

HI,

I am in a similar situation to some of the others on this pag.
I took on a 9 year lease for retail bussiness and the bussiness failed as i have been on maternity for the last 9 months. A friend of mine informally tookm over the bussiness when i had the baby but was failing to keep up with the rent payment.

I have struggled to come to an agreement with landlord. He has been a bully and has blocked several attempts of minet to just sell the bussinesss and pay him his outstanding rent.

I have offered to pay the sum of £2000 on a weekly basis of £100 a week.

He does not respond to emails or messages and threatens to take me to court if i dont give him his money in 4 weeks.

He has given me false hope in the past that i can sell my lease or bussiness but then gone back on his word.

He also has all my currents possession which he claims he has binned. We took on the lease and spent £15,000 on refurbishing the property which has increased the value of his property.

I am a single mum with two children and he has been very vibdictive in his ways,. I am unable to afford legal support at the moment.

Please help me what can i do?

By Emily Leeming on November 15th, 2016

Dear Deborah,

Unfortunately we are not able to assist you in this matter as your property is in Scotland and therefore out of our jurisdiction. We are, however, happy to provide contact details for a solicitor in Scotland who may be able to assist you. If this would be of help to you then please contact our property team on 01772 258321 or email me at Emily.leeming@harrison-drury.com for further details.

Kind regards,

Emily Leeming

By james on November 16th, 2016

I have taken on a lease for a 5 yr fixed term and fixed rent for that term
When we moved in the land lord informed us we had a month to do the usual refit
This we did on time But the restaurant down stairs singularly failed to achieve it has been 6 months of building work drilling constant buling noise drilling form 9am till 4 pm

I had a meeting with the land lord , he informed me essential work will need done
3 weeks he said , its been 6 months

We have tried to get in contact land lord he will not respond, the only response we get from him is his bill

We have tried talking to the builders the tenant down stairs but every agreement we make they break,

We have offered to close some days so they can carry out the heavy work , they then do that when we are open instead
Its been now 6 moths of this and its killing out cliental , our client basically have to come through a building site
We would never have agreed to rent this unit on first floor if we knew this was going to be done
Can any one help

By Debra Ball on November 18th, 2016

hi If a landlord changes the locks due to rent arrears and prevents the tenant from trading does this mean the lease on the property ends? The landlord is saying the lease is still valid.
Please advise

By Ruth on November 20th, 2016

I am about to enter into lease negotiations for a commercial lease for the ground floor of a high street property. The Heads of Terms have been agreed between myself and the owner of the building. My solicitor is advising me to have local searches (Local search, Water and Drainage, Environmental and Chancel carried out at an additional cost of £750+ vat. I am not so sure I need this as I am will only be a tenant, I am not buying the property. The location of the premises is in a busy prosperous, nature protected area that is not in danger of having a motor way built through it or any other local planning (fyi: the new tenants moving into floors 1 & 2 are not having searches carried out) I will be paying a service charge which relinquishes me of any responsibility for fundamental issues that could occur.

What is the general opinion? do I really need to instruct these searches to be carried out?
thank you

By Elaine Fraser on November 21st, 2016

We where going to take on a lease on a freehold public house but after months of problems over the structure of the lease we decided on the advice of our solicitor not to go ahead. We installed a commercial kitchen and some various other items and the owner once informed of out plans changed the locks. We have not signed anything as this was all done under a verbal agreement. How do we stand in regard to recovery of our property
Many thanks

By Salma Yakub on November 22nd, 2016

Dear Ruth, Thanks for your query.

We do appreciate that commercial searches are very expensive however, we would never recommend anyone to enter into a commercial lease without carrying out a commercial search. These are carried out to ensure that you only make a commitment to proceed with your lease of the property once you are satisfied that there is nothing which could potentially interfere with your proposed use and interest in the property.

The searches would reveal the following matters:

Local search – this search is carried out at council. It will reveal matters such as the planning history of the property; whether or not any works have been done to the property; whether buildings regulations approval was required for, whether the property abuts the adopted highway; whether or not there are any financial charges registered against the property by the local council. We would usually recommend that tenants at least carry out a local search.

Drainage and water search – this search will reveal if the property is connected to the mains drains and water; it will reveal if there is a surface water drainage charge,

Enviromental search – as a tenant, you may become liable for any on site or off site contamination. The costs of remediating the ground can be very expensive and as such you should carry out an environmental search to see the extent of any liabilities.

Chancel search – we would recommend this search, it will reveal if the property you are taking a lease of falls within an area which, could have a potential liability to contribute to the repair of the church chancel.

Should you wish for us to provide more comprehensive advice on your matter, we will be able to do so on a fixed fee basis. Please feel free to contact our property team on 01772 258321 or email me at salma.yakub@harrison-drury.com with further details and I will pass these on to the team for consideration and they will then get in touch with you.
Kind Regards
Salma Yakub

By Robert Burn on November 22nd, 2016

Dear James,

Thank you for your query. It appears there are two lines of enquiry to consider here.

The first is your position in relation to your landlord and the lease. We would need to review the terms of the lease in order to advise you in this respect. Tenants are generally entitled to quiet enjoyment of their property, and your landlord may be breaching that entitlement by allowing the restaurant’s current course of action. This is known as “derogation from grant”.

The second line of enquiry is in relation to the restaurant, as a claim in nuisance may be available to you against the restaurant’s owners. Claims in nuisance are sometimes available against landlords, but only in very limited circumstances.

If you would like more information regarding your options, please do not hesitate to contact our property litigation team on 01772 258321 or email me at robert.burn@harrison-drury.com.

Kind regards,

Robert Burn

By Robert Burn on November 22nd, 2016

Dear Elaine,

The first thing we need to do here is establish the basis on which you occupy the premises. The lack of a signed agreement does not mean that a lease or licence does not exist, so we will need to carefully examine your circumstances before we can provide any advice in relation to your query.

It is important that you act quickly in this scenario, so please contact our Property team as soon as possible on 01772 258321.

Kind regards,

Robert Burn

By Vanessa Gilbert on November 25th, 2016

I am interested on a leasehold guest house at the price of £175.000 but it only has 10 years left of a 21yr lease rent is £23000 per annum. My question is what happens if the landlord does not want to renew the lease will I have lost the sum paid out as I would not be able to sell the lease which is what the owners of current leaseholders are doing?

By Steve on November 27th, 2016

Hi, I took out a 1 year lease on a unit and the lease came to an end over a year ago. I have made attempts to renegotiate the lease with the landlord however he refuses to take my calls.
Recently he has. Stopped using a property agent and wants to collect the rent himself, also he wanted to alter the terms of the lease without discussion. I rejected this and the outcome was him deciding to leave thing as they were which I also objected to as I still wanted a renegotiation. This has gone on for a few months now and because he won’t talk to me and I have nothing in writing to say he no longer wishes monies to be paid to the agent, I have withheld the rent.
He has now locked me out of the unit again without notice- can he do this legally?
Thanks for your help
Steve

By Natalie Bowditch on November 28th, 2016

Hello, I own a small off licence in England and have recently found out that I have been paying the upstairs tenant’s utilities as well as my own. This has been going on for 2 years. The letting agent for the property has said that the money will be refunded and has made an initial payment but there is still over £2000 remaining and the situation is continuing as he will not get a separate supply put in. He has responded to all of my emails with the fact that the upstairs tenant hasn’t paid him, but that shouldn’t really be my problem as he has managed this property for over 10 years. Can I withhold my rent or is there a another way to handle this? We have been emailing him for the next payment for over 4 months.

By Hanna on December 8th, 2016

Good evening

My company currently owes over £6000 in rent arrears.
The company is technically insolvent and therefore ceased trading.
The company does not have enough money or assets to go into liquidation therefore I intend to apply for a strike off.

As the director of the company I have signed a personal guarantee for the commercial lease (attached).
Question : Am I personally liable for the rent arrears?

By Mac on December 15th, 2016

Forfeiture of Commercial Lease.
My company entered into a 25 yr FRI lease which expired in 2007. The lease was extended via a Tomlin Order to a further 25 years but the lease has not been executed due to a technical defect in a drawing (although both parties have agreed to the terms of the lease). In April 2016, a new landlord has taken over. We met in Oct to try and sort out previous arrears in service charges which we have refused to pay until the (past) landlords provided a service charge demand that was compliant with the terms of our lease (% payable varies with gross external area of lettable units. Gross external area increased for temporary periods as landlords rented out common areas to various stalls/booths etc). Also past landlords were in breach as they failed to maintain working temperatures in the unit (temperatures fell below 60 degrees and one of our staff walked out) and there was inadequate cleaning and security. The previous landlords understood that we had a reason for witholding payments and so never pressed the issue. However, the new landlord claims that we now owe them the previous unpaid service charges but we cannot make any counter-claim which they say has to be against the past landlord. This seems unfair and wrong.
Also they ow want us to open on Sundays (as the lease requires us to open at local shopping hours) even though for the past 34 years we have never opened on Sundays.
Finally, the landlords claim that as the new lease is not signed, it is not valid and so we do not have any protection for occupation.
What would you advice?

By Nick Davies on December 16th, 2016

Hi, We have recently take a lease of part of a building shared with 2 other businesses. We are looking to do some electrical work in our section and our electricans want a copy of the safety certificate before they do any work. I have contacted the landlord and he says that he does not have one and that we took the building on it that state and we should be responsible for it. I understand that we have to provide a certificate for any works we carry out, but surely it must be a legal requirement that the landlord must provide an original one so the building is fit for purpose before we move in. Is this right?

By Jenny on December 17th, 2016

Hello,

I took over a lease on a Grade ll listed shop in May 2014 until November 2016 (which was the five yr break clause). During the transfer of the lease, it was confirmed to my solicitor that the dilapidations were up to date (May 2014).

However shortly after, I discovered that the shop was not ‘legally compliant’, as well as being in a ‘dated’ decorative state which I improved drastically.

There was no electrical safety certificate, nor any fire risk assessment available? I paid to have a fire risk assessment done, thereafter had to install smoke alarms, emergency lighting, emergency signage and put up fire safety boarding in many areas. I had to install a new rcd electrical fuse box in order to obtain an electrical safety certificate, (which was listed on the dilapidations list).

RCD fuse boxes have been a legal requirement since 2005, so why wasn’t an updated one fitted in all these years?

I was totally shocked to receive a dilapidaitions bill of £22,000 in October 2016, (which stipulated this could also rise?). I had already spent around £14,000 on refurbishment to improve the shop aesthetically to date and very importantly make it compliant.

However, I strongly feel I was actually misled into renting a shop which was trading ‘illegally’ for many years?

Whose responsibility is this? Surely it’s the Landlord’s initially to provide safety certification etc, as they advertise a retail shop to let, but do not state that it is not ‘legal’? Isn’t this witholding very important, relevant information? False advertising?

When I asked the Landlords about this, I was informed it is a full repairing and insuring lease .. end of…. which doesn’t seem fair, whilst I appreciate it is a full repairing and insuring lease, but surely on a shop that is actually ‘legally established and safe’ to trade to the public in the first place?

Another issue is I have been asked to remove moss on the roof which has been there many years before I took over the lease. However I was told the dilapidations were up to date, so how come I am being charged now and am responsible to remove moss that has been there for many years?

I asked if I did have the moss removed by my workmen and the roof happened to leak as a result (highly likely given the size of the moss clumps), as the moss had been left for so long, would I also be responsible? I was told yes I would be?!

I have had to employ the services of a chartered surveyor to assist me (another large expense) to deal with the Landlords on my behalf. I asked him if I paid the money to remove the moss that the Landlords requested, would they actually do the job? He replied probably not, which would mean that the next incoming, unsuspecting tenant would be liable and he said most probably, yes.

So from what I understand, even if I pay the Landlords they would not do the work as has happened with me obviously, as I was informed that the dilapidations were up to date (but obviously not the case, given the moss not being removed?) and then the same scenario would continue, which is despicable practice.

In May 2014, I had to call in the Fire Department to address the issue of the fire risk assessment and despite the fire officer ‘representative’ not being very ‘convinced’, I was told that she would approve things as ‘satisfactory’ although not ‘ideal’, as I had been placed in a very ‘awkward’ situation.

I was asked for an ‘asbestos’ report which was also on the dilapidations list. Surely again this is the Landlord’s responsibility initially? I arranged for this to be done and the inspector undertaking the ‘asbestos’ report asked me why was I doing this when it was the Landlords responsibility, as they owned the building and when I said I had a full repairing lease, he informed me again that it wasn’t the tenants responsibility but the landlords?

I cannot fathom how commercial landlords are allowed to rent retail property (especially small shops) without being held responsible in any manner whatsoever?

Surely I should have been issued with all these documents,(fire risk assessment to show the building was suitable for trading, electrical safety certification, asbestos report etc), although I had no idea as no one advised me and I was new in the retail trade? All I was told was the dilapidations were up to date!

I think it’s highly unfair and unjust. I sincerely feel I’ve been treated very unfairly as a result. There is very little information to ‘safeguard’ small business owners from being caught up in similar scenarios and I feel this is an area which really needs to be seriously addressed and clearly defined.

I have gone into huge debt as a result of this. Any advice would be welcomed please.

By Steven on December 19th, 2016

We took on a full repairing and insuring lease in Aug 2015 for 4 years.
We however we not shown our boiler room and the boiler room was not detailed on any lease floor plans and was not detailed on the lease.
The boiler room that serves our floor is one floor down and the commercial boiler is in a state of repair (which we have had to pay for several times already).
We currently have no heating served to our floor due to a broken boiler point – again located in this room.

We pay a service charge however the landlord simply states that boiler fixes and the boiler room are our responsibility.

Its obvious that the boiler room was hidden from us until the lease was signed etc – wondering if there is any advice which could help us here

By Daphne prince on December 21st, 2016

I am leaving my shop and its agreeable to the landlord. I gave him it in writing, then a week to go he came in the shop and said everywhere had to be decorated also partition walls that the lady put up when I took over her lease has to be taken down. He has never kept the property maintained the walls in lots of the rooms have damp on them so cannot be painted. The exterior is falling down he would never repaint. One glass has broken, I told him as frames are rotten, he said leave it now he is saying that is up to me. Which I would have done on my insurance. On the last day when we hand the keys to him can I get him to sign a letter of satisfaction. If so have you a template

By Z Mohammed on December 22nd, 2016

HI,
I am in a similar situation to some of the others on this page.
I took on a 10 year lease for retail business and the business failed as i have tried for plaining permissions
As I have struggled to come to an agreement with landlord. He has been a bully and has blocked several attempts of mine to just sell the business and pay him his outstanding rent.
He does not respond to emails or messages and threatens to take me to court if i don’t give him his money in 4 weeks.
He has given me false hope in the past that i can sell my lease or business but then gone back on his word.
He also has all my currents possession which he claims he has binned. We took on the lease and spent £10,000 on refurbishing the property which has increased the value of his property.

Please help me what can i do?or what can he do to me if he takes me to court?

By jools on December 28th, 2016

I have a salon and had a 1 yr lease .i rent the shop. i have been in the salon for 12 yrs and am looking to exit. do I have a right to sell my business or would I need the land lords consent as i think they would be against it. ?

By Matthew Astley on December 29th, 2016

Dear Steve (post 27.11.16)

Thank you for your enquiry.

Before being able to provide you with full advice, tailored to your particular situation, we would need to have sight of your lease and any other relevant contractual documentation, information and correspondence. The rights that both you and your landlord have will be led by your lease, so you will understand that it is essential that any solicitor reviews this before advising you.

There is potentially a remedy open to landlords of commercial properties called “forfeiture” which can allow landlords to re-enter properties when rent is outstanding. From what you have said it appears that your landlord may have forfeited the lease. In order to advise you if your landlord was entitled to do this or if you have any recourse against him, we would need significantly more information.

To discuss things further, please do not hesitate to contact me on the telephone number or email address listed below. Alternatively, you may contact a member of our Commercial Property team; to do so, please call 01772 258321 in the first instance and ask for a member of the team.

Kind regards

Matthew Astley
01772 429209
matthew.astley@harrison-drury.com

By Matthew Astley on December 29th, 2016

Dear Hanna

Thank you for your post earlier this month.

Unfortunately I cannot see the personal guarantee which it appears that you attempted to attach. However, if you have personally guaranteed a commercial lease, then there is a good chance that you may be personally liable for the rent. This is of course dependent upon the terms of the lease and any personal guarantee that you have signed. Unfortunately we are unable to provide any advice without seeing what you have signed and meeting with you to take your instructions.

At Harrison Drury we have expertise throughout the full range of commercial, property and insolvency subject areas and so we are likely to be well positioned to assist not only in relation to your query regarding the personal guarantee but also with your present situation in the round.

If you would like to receive advice, please do not hesitate to contact me on the telephone number or email address listed below.

Kind regards

Matthew Astley
01772 429209
matthew.astley@harrison-drury.com

By Robert Burn on January 3rd, 2017

Dear Jools,

Thank you for your enquiry, which can be broken down into two distinct questions:

1. Do I need my landlord’s permission to sell my business?

2. Can a person purchasing my business use the same premises I have been using for the last 12 years?

Put simply; the landlord’s permission is not required to sell a business. However, if your landlord is also a partner, shareholder or director in your business, this answer may be more complex.

Unfortunately, the second question cannot be answered without more information about the terms of your lease. If a written lease exists, we would need to see a copy. The terms of the lease will dictate whether it can be assigned or sublet, as well as how it can be terminated.

If you would like to discuss this issue further, please do not hesitate to contact me on 01995 676138 or robert.burn@harrison-drury.com.

Kind regards,

Robert Burn

By Nigel Snowden on January 4th, 2017

Hi,

Sorry can I ask you a quick question?

I lease a commercial premises for storage purposes and I dont have a lease! Basically when I bought the ongoing business back in Apr 15 I was told I would get a lease but it never materialised! I have now had some issues and some bullying from the LL’s plus also they are now saying that I have to pay VAT on the rent because its a storage facility under HMRC rules. I dont have an issue paying the VAT if that is the case however I am still angry I dont have a lease plus the really odd thing is that there are 5 other businesses on the same site and I have found out that they dont have leases either so I thin that LL’s are up to no good possible tax evasion or something like that! My ultimate question is are the LL’s legally required to give me and the others on site a lease?

Regards

Nigel

By Alex Walmsley on January 5th, 2017

Dear Nigel,

Thank you for your comment.

If your landlord has exercised an option to tax in respect of the property, then he will be entitled to charge VAT.

In respect of your second query, there is no obligation for your landlord to provide you with a lease. The basis of your occupancy will depend on what was agreed between you and your landlord. It is possible that you could occupy the property under a tenancy at will or in the alternative as under a periodic tenancy, the period being determined by the frequency of rent payments. In order to advise definitively, we would require a full chronology of events and sight of copies of any correspondence between you and your landlord.

If you wish to discuss matters further, please do not hesitate to get in touch with me at alex.wamsley@harrison-drury.com or contact a member of our commercial property department on 01772 528 321.

Kind Regards

Alex Walmsley

By paula rule on January 5th, 2017

Hi, I have been renting a pitch from private landlord for 2 years. I hve now decided to sell the street food trailer and the prospective buyer wants to continue the lease on the pitch. My landlord is happy to do this but wamts to charge me £1000 in admin fees…this seems unresonable to me ? also i have rented a car parking bay for 2 months. In the contract it states that if I want to terminate AFTER 3 months I must give one months notice. Does this mean that during the first 3 months I can leave the tenancy without ANY notice? I have not paid any deposit on the car parking bay.

By Ms warren on January 6th, 2017

Hi my partner has leased a shop for just over a year. The shop has some serious Leaking both from the roof and the tenants upstairs. Nearly everyday when it rains we arrive to soaked floors and damaged goods. But worse when the tenants upstairs use their shower we also have leaks in the middle of the shop. The landlord has refused to do any repairs but keeps increasing the rent. We intentend to withhold the rent now to get the repairs done as we suspect if we leave he may not return the £7000 deposit and claim that property needs to be made good by us even though the ceiling was like that when we took the lease but has got worse over the year. We were also unaware that the roof problem was ongoing when we took the lease as the landlord claimed it was a previous problem that had been fixed but left stains. The landlord also claimed that we owe him a year landlord insurance that he has never mentioned befor. I asked him to produce the insurance papers as surely he should have used that to repair the building. Are we supposed to pay landlord insurance, I’m thinking that this is building insurance and surely that is his cost as the owner of the building. Please advise. Thanks

By Emily Leeming on January 6th, 2017

Dear Ms Warren

Thank you for your enquiry.

Unfortunately it will be difficult to respond to your enquiries in full and precisely without seeing a copy of your Lease. The extent of your repair obligation and your Landlord’s repair obligation should be dealt with in the Lease. Assuming your Lease is of the ground floor only, there may be a clause in the Lease placing liability on the Landlord to ensure the remainder of the building is kept in repair. There may also be a covenant on yourself to contribute towards the cost of the Landlord keeping the remainder of the building (i.e. the roof) in repair. If there is such a clause and your Landlord has failed to comply with their obligations we can discuss what options are now available to you.

In addition, leases almost always include a clause whereby the rent must not be withheld or deducted by the Tenant. Failure to pay the rent can result in a number of consequences for you which include liability to pay interest, liability to pay damages and potential forfeiture of the Lease.

Insurance arrangements will also generally be determined by what the landlord and tenant agree and set out in the lease. It is not uncommon for the Landlord to insure the building and claim a proportion back from the Tenant.

We would strongly advise seeking further advice from us and providing a copy of your Lease in order for us to assist you further and consider the options available to you.

If you would like any further guidance then a member of our Commercial Property team would be happy to help you. You can contact the team on 01772 258 321. Alternatively, you can reach me by email at Emily.leeming@harrison-drury.com.

By Matthew Astley on January 11th, 2017

Dear Daphne (post 21.12.16)

Thank you for your enquiry.

There are specific rules governing the termination of business leases by a landlord or tenant, and the rights that you have will be led by your lease. Therefore, to be able to provide you with full advice, applied to your particular circumstances, we would need to have sight of your lease and any other relevant contractual documentation, information and correspondence, including the writing to your landlord to which you refer.

Following our review of the above mentioned documentation and upon obtaining further information from you as necessary, we would then be able to advise you on both the termination of the tenancy and your rights and obligations under the lease itself. This would include advising you on your risk of liability in relation to any alleged disrepair and/or other issues allegedly arising in relation to the property, and what you may do to limit such risk.

If you would like to discuss things further, you may contact a member of our Commercial Property team; to do so, please call 01772 258321 in the first instance and ask for a member of the team. Alternatively, please do not hesitate to contact me on the telephone number or email address listed below

Kind regards

Matthew Astley
01772 429209
matthew.astley@harrison-drury.com

By Janet Rowland on January 13th, 2017

We have been leasing a shop for the last 10 years on a renewable 5 year basis. The lease expired at the end of December we have not heard from the Landlord but have continued to pay the monthly rent. Where do we stand in relation to the property.

By glen on January 14th, 2017

my wife and i took a full repairing lease of a public house 20 years ago .there is 9 years left on the lease .our business is failing and we want to get out .are we liable to pay the last 9 years of rent if we go bankrupt .

By Karen Gray on January 15th, 2017

I’ve been renting a commercial office space as a photography studio for the last 4 years. The first 3 years I had a contract. The last year I’ve had no contract due to the estates manager not drawing up a lease even though I chased and chased for this to be done.
I got a email a week ago saying they want me to leave the premises by 25th Feb 2017 due to another business wanting to move in that is willing to pay more than I do!!
I have a meeting with the new estates manager tomorrow morning at 9am (Monday 16th Jan 2017) to discuss this. Surely I have rights? In 4 years my rent has always been paid on time. I haven’t broken any of the old contract details. They just want more money. Please can you help me .. hopefully before tomorrow morning? Thank you so much.

By Alex Walmsley on January 17th, 2017

Hi Janet

Thank you for your comment.

Before being in a position to provide you with any advice, we would require sight of the lease and any other associated documents, copies of any correspondence between yourself and the landlord and a detailed chronology of events.

On the basis of the information provided, we are unable to determine your current basis of occupation. It may be possible that you have a business tenancy protected by the security of tenure provisions contained in the Landlord and Tenant Act 1954 (‘LTA 1954’), provided that the lease was not contracted out of benefiting from these provisions when the same was granted. A lease benefiting from the security of tenure provisions contained in the LTA 1954 will not terminate at the end of the contractual term, it will continue under the LTA 1954 until it is terminated in one of the ways specified by the LTA 1954.

Alternatively, if the lease was contracted out of the provisions of the LTA 1954, it is possible that you may now occupy the property on the basis of periodic tenancy, the period being determined by the frequency of rent payments, which in certain circumstances will gain the statutory protection afforded to tenants under the LTA 1954.

Should you require any further assistance, please do not hesitate to contact us on 01772 258321 and we will be more than happy to assist you.

Kind Regards

Alex Walmsley

By John on January 18th, 2017

I’ve got a 5 year commercial lease my rent is due on the 1st of each month I’ve been paying it 7 to 10 days later cause his partner told me I had a 10 day grace period and his other partner told me I don’t and I’m in default. What could happen to me if I continue paying it like I was doing?

By eleanor on January 18th, 2017

Hi
As a partnership (of 2)we have a commercial lease
the partnership has broken down both personal and business
can the land lord refuse to take one partners name off the lease if both partners have requested this to be done?
thanks in advance

By Salma Yakub on January 19th, 2017

Hi Karen

Thank you for your comment.

Before being in a position to provide you with any advice, we would require sight of the lease and any other associated documents, copies of any correspondence between yourself and the landlord and a detailed chronology of events.

Following our review of the above mentioned documentation and upon obtaining further information from you as necessary, we would then be able to advise you on both the termination of the tenancy and your rights under the lease itself.

If you would like to discuss things further, you may contact a member of our Commercial Property team; to do so, please call 01772 258321 in the first instance and ask for a member of the team. Alternatively, please do not hesitate to contact me on the telephone number or email address listed below

Salma Yakub

By Sam Dagnall on January 19th, 2017

Hello,

As normal we are paying the building insurance for the property we have a lease for.

I have an issue with the cost and the possible cover.

Our landlord uses a broker to send us an invoice, I asked the broker for a copy of the policy. They sent me a policy summary, within this I am lead to believe we have cover for the following:
Tree felling up to £2500
Concern for welfare up to £15,000 (entry to a residential property by the police in case of a vulnerable person)
Landscape Gardens up to £25,000 (damage to buildings including landscape gardens)

Now my issue with this is that we’re in the city centre with no gardens, no trees and no part of our property is residential. So could this be pushing up the cost of our premium?

I have also been informed that we are part of a portfolio and also feel that we may be unfairly subsidising other properties.

I have written to the landlord for a copy of the full policy details as this is allowed within our lease. Is there any advice you can give me?

By HD Marketing on January 20th, 2017

Dear Glen,
Thank you for your comment. Before being in a position to provide you with any advice we would require sight of the lease and all the circumstances giving rise to your query. Following our review of all relevant documentation, we will be able to advise whether you will be liable to pay the rent, and provide information in relation to our costs. If you would like to discuss things further, you may contact a member of our Commercial Property team; to do so, please call 01772 258321 in the first instance and ask for a member of the team.

Kind regards

Rabia Bapu

By BARRY DAVIS on January 21st, 2017

Hi I am mid terms in a 10 year lease for a food outlet on a industrial est, we have spent money on the unit etc, etc. The landlord has decided to redevelop the site and my unit is in his way they are a big company and business this year has been slow but rent is up to date. They have asked me to walk away and the lease will be cancelled. I told them i’m not interested as i have built up a business over the last 6 years. Then they said they would relocate me on the site but i am very dubious about all of this.
I have a protected tenancy but wanted to know what they can do to force me out. I don’t want compensation I simply want to run my business. If someone could help me this would be great.

By jonathan oates on January 22nd, 2017

Hello
I have been leasing a property for 3 years and the lease has now run out. It was a run down building and we spent £18000 building it into a late night bar.
Every nut, bolt, fixture fittings, electrical wire and plaster board is mine.
He wanted to sell to us, but at nearly 40k above market value we simply can’t afford it.
Now he wants us out by 1st Feb 2017.
The lease ran out end Oct 2016. We tried to raise the funds to purchase but could only raise 150k. He wants 180k. The property has been valued with fixture and fittings at just 140k.
So how long do I have? Would he need a court order to get me out? Do I have to hand over the keys as he is insisting, although the reception area and entrance door was built onto his property?
Do i have anyway to save my business from this capitalistic attitude?
I only have a week left so any advice right now would be so appreciated.

Thank you

Jonathan Oates

By Salma Yakub on January 24th, 2017

Dear Jonathan,

Thank you for your comment.

Before being in a position to provide you with any advice, we would require sight of the lease and any other associated documents, copies of any correspondence between yourself and the landlord and a detailed chronology of events.

On the basis of the information provided, we are unable to determine your current basis of occupation. It may be possible that you have a business tenancy protected by the security of tenure provisions contained in the Landlord and Tenant Act 1954 (‘LTA 1954’), provided that the lease was not contracted out of benefiting from these provisions when the same was granted. A lease benefiting from the security of tenure provisions contained in the LTA 1954 will not terminate at the end of the contractual term, it will continue under the LTA 1954 until it is terminated in one of the ways specified by the LTA 1954.

Should you require any further assistance, please do not hesitate to contact us on 01772 258321 and we will be more than happy to assist you.

Kind Regards
Salma Yakub

By PETER WEBSTER on January 26th, 2017

We have a free of tie pub lease. We have been closed for 3 months due to flooding cause by a roof contractor. We are looking to claim loss of taking from the Roofer but are getting no help from the Pub Company.
The flood has unearthed serious electrical issues which are the Landlords responsibility, however they are dragging their heels in getting this done. We are close to going bankrupt and would be able to open and trade once the electrics are done.
If we go bankrupt because of the electrics can we sue the landlord? Does he have a timescale to do the repairs?

By Stephen Lawson on January 31st, 2017

My landlord changed the locks so I could not gain access to my rented property.
I was meant to have left the premises in December but failed to. I emailed the landlord and asked for an extension to end of January, I got no response except an invoice for January rent.
I had short paid rent of about £200 by the end of 2016 and I have not paid January rent.
I received an email saying I had to now be out by the 29th of January and the locks would be changed the 30th, I emailed and asked to wait till the end of January but found the premises locked.
I had moved out the majority of goods but had one truck load left and a vehicle, is there anything that can be done or am I in the wrong.

By Matthew Astley on February 2nd, 2017

Dear John (post 18.01.17)

Thank you for your enquiry.

Ordinarily, a lease will specify the date on which rent should be paid, and from what you say in your post, I assume that your lease specifies that payment of the rent is due on the first date of each month.

There could be a whole variety of clauses in your commercial lease that may be relevant to late payment of rent. For example, sometimes there is a clause in commercial leases which allow the landlord to charge interest when rent becomes overdue – either immediately or within a set number of days specified in the lease. Other leases contain a forfeiture clause which allows the landlord to commence a process to re-enter or take back the commercial property if the rent is late by a specified number of days (usually 14 days).

Unfortunately I cannot advise you without knowing the exact terms of your commercial lease and which clauses it contains. As general guidance, if you are concerned that you will be penalised for your late payment, then the easiest step to take is to simply pay your rent on time.

In order to be able to provide you with full and tailored advice, we would need to have sight of your lease (and any other relevant contractual documentation, information and correspondence) in its entirety. We would also need to obtain full details of your discussions and any written correspondence with, and further information about, your landlord and his partner.

Upon reviewing the above documentation and after taking full instructions from you, we would then be able to provide you with full advice on your rights, responsibilities and options. This would include consideration of whether it is possible that your agreement has been varied in any way, whether you have in fact made late payment and the consequences which may flow from such late payment (such consequences depending upon the precise terms of your lease), and what you should do going forward.

If you would like to discuss things further, you may contact a member of our Commercial Property team; to do so, please call 01772 258321 in the first instance and ask for a member of the team. Alternatively, please do not hesitate to contact me on the telephone number or email address listed below.

Kind regards

Matthew Astley
01772 429209
matthew.astley@harrison-drury.com

By Lisa Clarke on February 2nd, 2017

We have been in our unit for 8 years, the landlord is a nightmare when it comes to repairs. We’ve told him that we keep getting leaks when we have heavy rain as the roof is simply patched up now and again so never actually properly fixed. We had an incident in nov last year when we had such heavy rain that it flooded through the roof and caused us lots of damage such as carpets, materials. The main problem was that the water got into the electrics and was left with no power whatsoever, I called the landlord who told me he was in france on holiday and nothing he could do for another week! In the end he said to get an electrician out as long as we not talking silly money! So I managed to call in a favour from my neighbour whose an electrician and he came out and got us back on the three phases but needed Western electric to come out as it had also blown one of the main fuses. It was all sorted and I informed the landlord as requested and told him that the roof was still leaking and he assured me they would come and fix the roof soon. So tonight I have a visit from my neighbour to say that he’s not been paid and the landlord has said its up to us to pay as not his responsibility! I’ve pointed out to him that the problem only occurred as the leaking roof wasn’t fixed which meant we suffered water damage. The problem I have is my neighbour is demanding I pay him as I called him. I’ve pointed out also that we’ve not claimed off him for the damage we incurred or the revenue we lost while we had no power. Am I correct in stating that its the landlords responsibility to provide a working live feed into the unit?

By Salma Yakub on February 3rd, 2017

Dear Lisa

Thank you for your enquiry.

Unfortunately it will be difficult to respond to your enquiries in full and precisely without seeing a copy of your Lease. The extent of your repair obligation and your Landlord’s repair obligation should be dealt with in the Lease. If your Landlord has failed to comply with their obligations we can discuss what options are now available to you.

We would strongly advise seeking further advice from us and providing a copy of your Lease in order for us to assist you further and consider the options available to you.

If you would like any further guidance then a member of our Commercial Property team would be happy to help you. You can contact the team on 01772 258 321. Alternatively, you can reach me by email at salma.yakub@harrison-drury.com.

By Angie on February 4th, 2017

We rent a cafe establishment in a community centre. The owners of the community centre seem to think they have the right to walk into our locked cafe if they need to. We can understand if there is a fire or a flood but if maintenance is needed surely they should consult us first before entering with their master key. All the stock in the cafe does not belong to them

By Lynn on February 8th, 2017

We rented a car park to a company. This company were the first users ,they occupied the car-park for over 3 years, they paid rent every qtr . We required the car park back, and giving a
Months notice came back into our possession. Many curb stones in the car-park are damaged
This car park was given on an agreement , is it liable after a survey for delapidations

By Rabia Bapu on February 8th, 2017

Dear Angie,
Before I am to provide you with any detailed advice in relation to the issues you are facing with the owners of the community centre, I would require sight of lease in order to consider the relevant provisions. I would then be able to review the lease, and provide a cost estimate of our likely fees for providing advice.
If you are happy with this approach, please send me a copy of the lease, as well as any other relevant documentation. I will then get back in touch with you. My email address is: rabia.bapu@harrison-drury.com.
I look forward to hearing from you.
Kind regards
Rabia

By sheila dixon on February 9th, 2017

Hi,
we are building a commercial unit and the build contract includes for tenants works which are part of the contract but which the tenant is paying for. There are also tenants fit out works which they intend to carry out after the completion of the building.
In respect of a License to Alter please can you advise if the works within the contract should be included within a license to alter or is it just the works they will undertake after Practical Completion?
Many thanks.

By Ildiko Benke on February 9th, 2017

Sir/ Madam,,
I rented a small space in a shopping center. Our space is near the restaurant and our space smells like burnt oil all day long. I mentioned this problem to my land lord, and she promised to address the problem next day. One month went by since and the bad smell still exit.
Can I ask for a different location in the same mall and keep the same lease?
Thank you in advance,
Best regards,
Ildiko

By Alex Walmsley on February 14th, 2017

Hi Stephen

Thanks for your enquiry, I apologise for the delay in responding to you.

Pursuant to the Torts (Interference with Goods) Act 1977 your landlord will have become an involuntary bailee in respect of the goods and can only dispose/ sell them once he has complied with the procedures set out in the Act, which include taking reasonable steps to contact you to remove the goods from the property.

In the first instance, we would recommend that you contact your landlord to arrange a mutually convenient time for you to attend the property to remove the goods. I assume that you do not wish to seek to take steps to re-occupy the property, should this option be available to you, however, we cannot advise you of your rights in this regard until we have had sight of the relevant documentation (i.e. your Lease and copy correspondence between yourself and your Landlord).

If you would like to discuss things further, please do not hesitate to contact me on the telephone number or email address listed below. Alternatively, you may contact a member of our Property Litigation team; to do so, please call 01772 258321 in the first instance and ask for a member of the team.

Kind Regards

Alex Walmsley

By John McLean on February 23rd, 2017

If I lease a commercial property in my name and my wife leases another in her name, are both properties treated separately when applying for small business rate relief?
Many thanks

By David Green on February 24th, 2017

Good afternoon,

We are looking for some legal advise re the following:

We have a very bullying Landlord that is ravenous for money and will use the smallest excuse to charge us for everything, he often cuts electricity under the excuse of people listening to very loud music (even tho this is a commercial property and several occupants work in the music industry and have longer sessions that can reach early hours in the morning and the building has 24 hours access) or when one of us do not pay the electric bill on time – even as soon as 2 days after he cuts electricity without any warnings and all by himself, of course he denies this and says he had to pay £150 to an electrician to have it cut and then he invoice us those £150 threatening with eviction if challenged. I know it is illegal for landlords to do this on a residential property, are landlords managing commercial properties exempt?

By Don on February 24th, 2017

Hi, can a commercial landlord start building a third floor on top of us (we are on second floor) mid term in our lease? He seemed to receive planning permission after we moved in and we never knew, but I’m worried as our stairs in the common area stopped at our floor so we thought it would be nice a quite and no one else will use it although it is officially common parts. It seems that if they go ahead we will clearly now have noise and builders going up and down the shared parts for months and I’m sure dust and issues will arise and it won’t look good for my clients while they building. Also concerned about noise from new tenants walking on our ceiling. Also in the future a second staircase extended up in the common parts will mean more traffic so it won’t be anything like we thought it would when we signed the five year lease. Is there any particulars I can look for in the lease that stops them doing this? Or any lines that may actually indicate they can build if they wanted to? In fact are they even allowed to build on top of us considering we took up the lease thinking we will have the top floor and now it will actually be a middle floor with far more traffic passing our hallways and on top of us?

By Frances Middleton on February 28th, 2017

I own a property left to me by my late husband. My youngest son has carried on the same business we used to run. We have taken out a minimum lease, but as I have 2 other sons who would want money from this property when I die, would he be able to buy the property from me now, also I would realise some extra cash from the sale.

By Helen on March 7th, 2017

Hello. My daughter has leased part of a building and over 8 years has built a good reputation and excellent cafe – the lease ran out two years ago and she has been trying to get it renewed since. The landlord now has given her notice and we find out it is because they want to run the cafe. This is so tricky as daughter has spent so much money building her business and has upped her turnover by twice what it was – does the landlord (charitable status) have any right to do this gaining from my daughter’s hard work and reputation…

By Heather White on March 10th, 2017

I signed a rental agreement for a salon property on a golf course beginning 01.10.2015, in September 2016 we knocked through to the adjoining unit and spent several thousands of pounds refurbishing. The rental agreement was not changed, just the quarterly invoice for rent increased. The rental agreement is literally one sheet of paper saying the rent is due quarterly in advance, includes electric, water and council tax and that the notice period is 3mths (in line with rent payments)from either party.

Currently I am behind with the last rent payment that was due 01.01.17 but I did speak tot he landlord and agree to make payments to clear it up, this week I haven’t had enough to pay and am worrying that he can lock me out of the salon….. can he do this? Thank you

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