I rent a unit in a property and use it as a Hairdressers. I have a manager in and all is good. I have a few other interests and have decided to sell the business and have found a buyer.

Now the hard part.

We have 3 years of a 5 year lease left. The buyers are willing to take this on and have spoken to the landlord. He has no objection to them being tenants but he will only accept a 5 year lease PLUS he wants £2500 off of them, up front to extend the lease. He has made in categorically clear, he will not let them be tenants unless they agree the extension PLUS pay the £2500 in cash, no receipt.

The buyers have said they can not and will not do this and have given me 1 week to sort it or the deal is off.

I have emailed the landlord and said look, you can keep the month up front deposit we made (£500) I just want out.

Im sure he cannot do this but he is the greediest individual I have ever met.

Hi Isiris

There are a number of issues associated with taking on the existing lease of a former tenant so be aware, as it may be preferable to take a brand new lease. Taking on a new lease would allow them to negotiate directly with the landlord and to take a lease for the length of term they need and on the terms they agree, not just what remains of an old lease.

Also important to remember the old lease is highly likely to be worded to say you must obtain the landlord’s consent to take on the lease and will require a licence to transfer or “assign” the lease will have to be prepared by the landlord or, more likely, its solicitors and sent to you and the new tenant for signing.

Finally if there are more than seven years (after extending) remaining on the term of the lease then he must register this at the Land Registry in order for it to be legally binding.

Andy

Sorry Andy, Im not the Landlord, I am the tenant.

Is the landlord being unreasonable in not allowing the transfer to go through.

Yes I understand that....the above are reasons why he is acting so and could be considered that its not unreasonable....but as for the £2500...whats that for ?

Yes I understand that....the above are reasons why he is acting so and could be considered that its not unreasonable....but as for the £2500...whats that for ?

He does that so he gets a chunk of cash. He calls it his little perk. We paid £5k in readies to set up the Lease in the first instance. As I got the hairdressers for nothing, I wasn't too concerned.

My argument is, hes in no worse position. He doesn't question the buyers worthiness of being tenants, as long as they pay for an extension rather than maintain the current one.

Well they dont require an extension.....your lease finishes and they request a new 5 YR one...tenants are usually responsible for the legal fees to which he would have to submit his costs and add it to the annual rent or pay up front.....if he wont agree to that or give a detailed costing...no new tenants.....no sale of business for you.

You sue him for lost sale of business ?

Well they dont require an extension.....your lease finishes and they request a new 5 YR one...tenants are usually responsible for the legal fees to which he would have to submit his costs and add it to the annual rent or pay up front.....if he wont agree to that or give a detailed costing...no new tenants.....no sale of business for you.

 

You sue him for lost sale of business ?

Yes, thats what I was thinking but cannot see what his issue is. We have always been good tenants, never late with the rent and now we want to move, he is simply trying to get £2500 extra and an extention on the lease which the buyers dont want.

They would have to take a 5 years...not just the 3 remaining...perhaps thats been figured into the 2.5 K....loss of rent if he cant fill the property for a further 3 years when it ends ?

Sorry Andy, I might not be explaining my point well or I dont understand you. Probably a bit of both

My point is this.

If I continue on, the lease expires in three years. The new buyers want to carry that on, for the 3 year remaining. They are prepared to take it on in all its terms as we were under so he is in no worse a position as what he is now. He wont allow them to do this. He will ONLY allow it if they take a new lease, of 5 years a fresh AND pay £2500 on top of the rent which is payable. This is £1250 per year for the extra 2 years on top of the 3 I have remaining

I believe he is being unreasonable in not allowing the lease to solely be transferred as a 3 year lease as he is not losing out. He doesn't have a problem with the buyers, as he is prepare to offer them a 5 year lease. He simply wont allow them to just take the 3 year on that we have.

I read this online

The Landlord and Tenant Act 1988 also states that a landlord owes a duty to the tenant to give consent except in a case where it is reasonable not to give consent.

Is it reasonable that he doesnt get another 2 years rent?

Thanks for your help on a Sunday. Much appreciated.

I understand fully Isiris from your point and the Landlords.....commercial leases are very complex unlike residential leases. Most if not all leases are either the minimum 5 years up to 10 years.

Some contain a guaranteed term in which the tenant is responsible for the rent for the full term...some allow for subletting and some contain provision for opt out.Believe it or not, there are some landlords which put special clauses in their lease agreements which entitle them to a percentage of the total sales price when the business is sold.

You would have to refer to your lease on all the above points.

From the Landlords stance he does not want a tenant for 3 years on an existing lease or to assign your lease to the new prospective tenants...so he is within his rights to demand it be 5 years...irrespective of your existing 5 years which you have only achieved 2 years of.

I dont understand where the figure of £2500 comes in....its not that expensive to create a new lease or the legal fees involved in assigning an existing lease.It could be as stated made up you exiting earlier than contracted plus fees for the new lease and a months rent up front...have you asked him how this figure equates ?

Andy

Sorry for the delay in replying

The £2500 is simply "His Drink" as he puts it. It has to be paid in cash and no receipt is given. Its 100% a tax dodge.

nothing to stop you keeping the lease on and renting the business equipment out to the interested party. Nowt to do with LL as it is still your business. I know that ties you to a spot for 3 years but you are in that particular spot already.