help with commercial lease

[upthecreek!]

my fathers company is 11.6 years into a 12 year lease, we had new landlords in april this year, who has said that the rent will go up to £25-30k, per year from £15k per year, this will happen in march 2008 when the lease is due for renewal, we can not afford the increase and got to move out, but the new landlord is going to hit us with a £20-25k delapertion order (repairs to the building to re-lease). there is NO lease that is signed by my father (the tenant), the new landlord only as a copy of the lease that we gave him, can anyone help please!!!!!!!!!!!!thanks

[Ed999]

Consult a solicitor immediately.

This forum is not for commercial leases. The advice given here is from people with practical experience of residential leases only.

A commercial tenant in England and Wales has special legal rights to continue in occupation of the leased premises, under the Landlord and Tenant legislation (originally this right arose under the 1954 Act), in some circumstances. But the right is dependent on serving special legal notices on the landlord, in the prescribed form, and within tight and inflexible time limits. Only a solicitor can cope with this.

Under the same laws, the landlord may be subject to legal restrictions on the amount of the new rent that he can charge. Only a solicitor can tell you.

The question of dilapidations under a commercial lease is a highly technical and specialised legal field. Only a solicitor can help you with it. He will advise you about the need to engage a surveyor as an expert witness, to challenge any schedule of dilapidations served on the tenant by the landlord. This will depend also upon the terms and conditions in the lease.

Only a solicitor can advise the tenant of his legal rights. And he will need to see the lease, and meet your father in order to learn the necessary facts, before he can advise him.

ANY DELAY IN CONSULTING A SOLICITOR MAY SERIOUSLY PREJUDICE YOUR FATHER'S CASE.



Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[onlynameleft]

I didn't know the forum was only for residential leases. I thought it was for consumers. Can't consumers be commercial tenants?

The 1954 Act is still in force. It was subject to Regulatory Reform in 2004 but that amended the Act itself, did not repeal it.

It is a complex area but less so for tenants now since the reforms and there are fewer traps for the unwary.

When you say 11.6 years do you mean 11 years and 7.2 months or actually 11 and a half years?

Unless the lease is contracted out of sections 24 to 28 of the 1954 Act then you have the right to remain unless and until the landlord brings the tenancy to an end in one of the prescribed ways, usually by service of what is called a section 25 notice.

That notice must give between 6 and 12 months' notice to determine the tenancy and will either offer a new tenancy or refuse one on one of the specified grounds. Unless and until that is served you can stay put (although you may be able to serve a request for a new tenancy - a section 26 notice).

In either case, the parties can apply to the Court for a new tenancy; either the landlord or the tenant can do this now.

There is little in the way of statutory limitation on what the landlord can charge by way of rent. However, the Act includes provisions for the Court to set the rent and other terms of the tenancy in the event it cannot be agreed and the rent will be a market rent.

As far as dilapidations are concerned, the position isn't really markedly different from that under a residential tenancy - at least the principles are the same; the numbers tend to be a lot bigger and there is no need for any kind of inventory to be in place for the landlord to have a claim.

It is a big area, far too big to narrow down here. You do need advice. My own view is that you don't necessarily need a solicitor's advice at present (although you might in future). You should first consult a chartered surveyor familiar with these issues (i.e. not an ordinary estate agent). Have a look in the yellow pages under surveyors and valuers.

He'll be able to advise on the issues and you will need building surveying advice on the landlord's schedule of dilapidations.

To go some way to putting your mind at rest, the claims in these schedules are ALWAYS inflated and it will be unlikely you will actually end up having to pay anything like £26K.

As you are stil in occupation, one option is for you to do the work specified yourself (if you can do it for less than the landlord's costs). Again, your surveyor will be able to advise tactically in that respect.

[upthecreek!]

thanks for the advise, is the lease valid if there is no tenant signature, because the way i see it is that the contract is void if there no signature, same with all other contracts, rental, car lease, tool lease etc etc...

[GlasweJen]

No, there could be an implied contract. Contracts are not always written, basically if both parties have acted as if the contract is in play for a period of time then the contract is an implied one.

[Goldlady]

Presumably somebody somewhere has a copy of a signed one. We had a similar thing happen to us, but our lease had expired. New landlord marched in one day and said he was going to double the rent. Three weeks later he had no tenants at all. That was ten years ago and apart from the dodgy bar steward trying to tell the council that we were still the tenants for the following five years (which resulted in the arrival of bailiffs at our home) we never heard any more.

[Aequitas]

As to whether a tenant needs to sign a lease, please see this thread where I dealt wth the matter at some length: Who is liable? Me personal or the company I signed on behalf of? Start with my post of 2nd June.

As to your matter generally, I agree that your first port of call should be a landlord and tenant specialist chartered surveyor who should know exactly what to do as to serving all necessary notices and counter-notices, negotiating a new lease at a market rent and advising on dilapidations if a new lease is not to be taken. He will let you know when a solicitor needs to be brought in - no need to bring him in before time!

Do not delay!

[Ed999]

I would like to sound a note of caution.

The original poster is not the tenant, and is giving only a second-hand account of events. How are we to be certain that a section 25 notice has not already been served, and that time is not already running against the tenant company?

The advice to consult a surveyor instead of a solicitor is highly dangerous. If a section 25 notice has been served, the tenant company needs legal advice. I am not convinced that a surveyor is the correct person to approach for legal advice.

Also, we have been given no information as to rent reviews in the course of the tenancy, a matter which may be of considerable significance. If the last review was within the last 3 years, the rent may already be at or near the market rent for the premises.

Also, a solicitor will be aware of the legal tricks that are available to the tenant to gain additional time in the premises at the existing rent, for example by the service of a pre-emptive section 26 notice.

There are many possibilities. The tenant company should consult a solicitor at once, for specialist legal advice.



Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[onlynameleft]

Ed, you do a great disservice to any number of highly competent surveyors whose bread and butter this type of job is. I work in this field, this is my job. In my not inconsiderable experience of this type of matter I find surveyors are generally perfectly competent in dealing with what, to them, is a perfectly simple matter.
You have admitted yourself you have no knowledge of this area so why not leave it to those who have?

[onlynameleft]

Oh, and another thing. There is no advantage whatsoever to be gained from service of a long dated section 26 request to stay on the current rent for longer. The landlord is able to apply for an interim rent with effect from the first date thast COULD HAVE been specified in the request; i.e. 6 months' hence. On that basis it can be considered counter productive for the tenant to make the request rather than wait for the landlord's notice. Tactics will depend to a large extent on valuation issues which is why the poster should see a surveyor and not a solicitor in the first instance.
Plus, if he wants to rely on the fact that he does not have a lease and instead has an implied periodic tenancy arising from his occupation and payment of rent (I don't think the argument has legs but I haven't seen the documents) then he would not be in a position to serve a section 26 request in any event.

[Esio Trot]

LandlordZONE has a dedicated section for commercial leases.

It has some very knowledgeable people on there, and I suggest that the OP posts on there and gives specific details like dates.

[Aequitas]

I agree with onlynameleft. I was a commercial landlord and tenant specialist conveyancer. The problems the OP has are essentially ones of valuation and such legal apects that need to be dealt with are purely procedural and well within the competence of a chartered surveyor specialising in commercial landlord and tenant matters.

[Ed999]

We will have to agree to disagree.

I stand by my comments of 3rd November.



Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.