Commercial Letting. Business Went Bust!

[Avesovum]

HI,

I hope somebody can help.

I had a business where I let retail space and had a 10 year lease with a 2 year break clause.

My business went bust in the first year and I exercised my 2 year break clause and obviously I couldnt pay the rent. My landlord went nuts and took me to court where I was ordered to pay £85 per month for the next 14 years which I have been doing for the last 14 month to clear the rent arrears.

The Landlord has £1900 of deposit belonging to me and £1000 worth of fixture and fittings left in the shop belonging to me. He did not advise the court of this and when I tried to tell the County Court Judge that this money was still outsanding, the Judge replied that is another issue we wont be hearing that today.

I felt a little upset and be-wildered that the landlord was going to get away with this.

The landlord has since found a new tennant which i'm presuming is paying the same rent as I was and the new tennant is also using my fixtures and fittings which I thought the deposit was put in place to return the premises back to before I let it.

My question is? As the landlord has a new tennant and he is not going to lose anymore rent, am I legally bound to still pay the landlord £85 per month for the next 14 years to clear the arrears.

Cheers, Any legal eagles comments would be much appreciated.

[MrShed]

NO - he is not entitled to both lots of rent IMO. You should take this back to court. Also, I fail to see any reason you are not entitled to the deposit. Not sure about the fittings. Did you file a countersuit in the initial court case? I can only imagine that you didnt, as otherwise the judge should have heard that section of the case.

[Avesovum]

Hi MrShed,

Thanks for your rapid relpy.

I didn't file a countersuit because I wasn't aware I could.

Can i just stop paying him or will I have to go back to court to have this case heard again? Can I demand the rent arrears back I have already paid the landlord upto the day he got a new tennant?

If so, will that cost me money? and how much?

I actually pay the landlord and a few other debts from the business through PAY PLAN (i don't no if you've heard of Pay Plan) But i can explain if not. I suppose Pay Plan should have advised me of this.

Sorry but i'm not switched on to this type of legal issue, but what does IMO mean?

Cheers

[MrShed]

You need to go back to court - you could be in breach of a court order if you just stop paying.

IMO, yes you can claim the arrears.

Small claims track costs between £50-150 if I remember correctly.

IMO = In my opinion

[Avesovum]

Thanks MrShed,

For £150 it will be well worth it to claw back about a £1000 of arrears and £1900 deposit, I will get the ball rolling and will let you know what happens.

Cheers.

[Avesovum]

MrShed,

Just one more thing.

Do you know which County Court Form I will need to do this?

Regards

Tony

[MrShed]

The number escapes me - sorry!! Someone else will be able to advise though.

I would also just await confirmation before you start taking to court. Although I am fairly sure I am correct, commercial residences are not my strong point, so I would double check

[Aequitas]

You say that the £85 per month you are paying relates only to rent arrears. If that is the case, then the fact that the landlord has relet does not entitle you to claim for a reduction of the amount of the arrears - they relate to a period before the property was relet.

As a separate action, you can claim the deposit and the value of the fixtures and fittings (provided they are not deemed to have become part of the property). The judge was quite right not to take this into account if you did not make a counter-claim or plead (at least not until the last minute) that the deposit and value of the fixtures should be offset against the amount claimed.

[MrShed]

Just FYI Aequitas (and to defend what appears to be stupid advice ) I read it as the £85 pm was to cover the remainder of the lease, not arrears accrured whilst the OP was PHYSICALLY in possession.

Could be wrong though as you rightly say.

[Aequitas]

If the payments are to cover the rest of the lease then the case was quite clearly wrongly decided.

A landlord has a choice: forfeit or keep the lease going. If he forfeits he loses the right to any rent after the date of foreiture (apart from any rent paid in advance, which will not be applicable if the forfeiture was for non-payment of rent). If he opts to keep the lease, he cannot claim any instalment of rent until it is due.

[Avesovum]

The payments are to cover the length of the lease which was 2 years.

The judge ordered me to pay the landlord £85 per month until all of the 2 years lease has been paid, but like I have said the landlord has re-let the property, which If im reading these posts right he has forfeited the lease and cant expect any more payments after I have repaid the arrears up until he re-let the property.

To avoid anymore confusion: I paid £625 per month rent, He re-let the property 6 month after I left, so technically the landord has lost £3750.

Are you saying that the £3750 amount is all I legally have to pay and can I claw back £1900 deposit back from the above amount or have I forfeited the deposit.

Just to give some exact background on the Court Case: The Judge placed a Charge Order on my property but could only be executed if I stopped paying the landlord the £85 per month the judge ordered, The judge also said to me at the end of the hearing (I have placed on the record that no further action can be taken by the landlord to re-coup his losses.)

I have since sold my property and moved to rented accomadation, the money I made from the house sale just bearly paid for legal fees and deposits for renting etc..

So I have another question: As the charge order cant be enforced anymore can the landlord look for some other way to make me pay if i stop paying him?

Cheers

Tony

[MrShed]

I think Aequitas question was, jsut for absolute clarification - when you were in POSSESSION of the property, were you fully up to date with rental payments?

I cannot stress enough that you CANNOT just stop paying him. You need to go to court.

[Avesovum]

NO, I fell behind by 2 month whilst I was still in the property and just before the third months rent was due I had no choice but to close down the business and hand back the keys.

Not that this has any bearing on the case. I realised about 3 month before that I was having problems with cash flow and informed the landlord of this and if any arrangents can be made to help (Not that he was under any obligation to do so) but I beleive if we could have come to some sought of arrangement then I would still have a business and he would not have had this problem.

I find the Court Circuit very unfair because the judge didnt even want to know how these arrears came about. He simply said to me "You have admitted the debt thats all I need to know" Infact IMO i found the judge very un professional because at the start of the hearing he thought I was the landlord and I had to correct him twice.

Anyway MrShed i wont stop paying him, and will start the ball rolling for court proceedings, even if I dont have a case it will be worth it to see if the landlord has the courage to turn up this time. Just by trying to re-open the case will annoy the landlord because he lives in spain 6 months out of the year but has an answering service in the UK.

Regards

Tony

[Aequitas]

It is difficult to comment further without knowing the full facts and exactly what it is the landlord claimed and what you admitted. On the face of it it seems that the landlord claimed too much and the judge allowed the claim because you admitted it. As I am not a litigator I am not sure if this can now be put right. However, I am sure that you can claim for the deposit. At the same time I can see no harm in attempting to raise the facts of the first case. Since this is going to be complicated you should probably instruct a solcitor, although I appreciate you may wish to rule that out on the grounds of cost.