Busness lease verbally issues

[ash4197]

Hi to all

I am after some advice for a friend. Details are as follows.

Two and a half years ago my friend agreed to buy a busness on lease for a Five years lease which the landlord agreed to verbally and papers were signed on the bases that my friend is taking the lease. (I don't know if the term was mentioned but verbally it was and there were witnesses as well).

The problem is that the Landlord gave verbal notice to leave at the end of the year (By this December which will be three years in the lease) but my friend is saying I have built up the busness as when he took over the shop,the weekly sale was about £3000 per week but now with time and effort the shop sale is about £8000 per week.

He has also taken out a loan for the period of five years and also invested in a franchise which was agreed for five years. Before the Franchise was signed my friend told the Landlord what his plans were and he was again given the go ahead verbally.

What are his rights. As the questions my friend has raised with the landlord are as follows :

I will leave at the end of the year but in return I want :

1. The landlord to pay the remander of the 2 Years left of the Franchise.

2. Pay the remander of the two years of the Loan as if after Five years the loan would be payed off.

3. Give me compensation for what the business is worth.
Could you please let me know what to do next.

If this goes to court what are my friends chances.

The reason why the Landlord was him to leave is that he wants to knock down the premises and build apartments which he has about a year to start hence next year.

Help and advice will be grateful.

[Aequitas]

You say "papers were signed"; what exactly did the papers say? They could constitute an enforceable agreement for lease.

Even if they do not, the landlord cannot bring the tenancy to an end by oral notice - he must serve at least six months in writing in accordance with Part II of the Landlord and Tenant Act 1954. If he wants possession he must state his grounds in the notice and prove them to the court. One of the available grounds is redevelopment, so it seems there is a fair chance that the landlord will succeed.

Compensation is calculated according to a statutory formula related to the rateable value of the property; the value of the goodwill or the amount of any outstanding loan will not be taken into account.

The best thing your friend can do is simply sit back. He need take no action until the landlord serves the proper notice.

Having said that, he needs to get a lawyer to look at the "papers that were signed" to see if he has grounds to require the landlord to grant a lease that will give him the balance of the five years he thought he had.

[ash4197]

Thanks

I will pass this information on.