Sub Let Tenant in arrears

[less2303]

We have inherited a sub tenant in a unit we are renting, who has no contract with us and has paid no rent at all since we took over.

 

We have now asked him to leave as we were receiving visits from Bailiffs and customers who had paid for work that hadnt been done.

 

We have now changed the locks on the main entrance, and are awaiting him moving the rest of his stuff out. Someone he owes alot of money to has come forward and said they want to put claim on his belongings in the unit to offset the debt he owes them, can he or anyone (including ourselves) legally do this, with or without going through the courts?

 

We have a contract for the whole unit with the landlord, and the sub tenant has no contract and doesnt exist there as far as the landlord is concerned.

 

As we have changed the locks, does the sub tenant have any legal right to enter for his property, and can he force entry to recover his stuff? He intends returning in the next few days to collect his stuff, which is all business related and doesnt include any personal belongings.

 

Any advice would be appreciated.

[Ed999]

I suggest you consult a Solicitor, immediately, as this is a difficult legal problem. The difficulties and uncertainties are significant.

 

 

Title

 

An unauthorised sub-tenant is, by definition, a trespasser.

 

But you need to be VERY sure of your facts, if you wish to avoid being sued for damages. Your very use of the term sub-tenant is rather worrying, since it implies the occupier in question holds some type of valid lease or tenancy.

 

How certain are you that a predecessor in title to yourselves did not grant a sub-letting to some 3rd person?

 

If you hold under a lease which does not ban all types of sub-letting and parting with possession, then it would be possible that a previous tenant under your lease may have granted a sub-lease of part to the person in question.

 

Alternatively, the sub-tenant might hold a lease of part granted directly by the freehold owner.

 

If this person makes a successful application to the court, on his own behalf, he could potentially obtain relief against forfeiture, and perhaps damages against you, if his current status is a result of some action in the past that resulted in his forfeiting a valid lease of the part of the unit in question.

 

You should investigate the title of this person: by making enquiry of him or his solicitor; by enquiring of your immediate landlord, and of any head landlord; and enquire of your predecessors as tenant.

 

 

Seizing goods

 

If you sue a trespasser, i.e. sue him for possession, you can potentially claim damages if you win, for a sum equivalent to the rent on that part of the unit - sometimes called 'mesne profits'. If you haven't done that, you probably have no right to seize his goods at present, at least if you are not claiming rent arrears as a landlord.

 

A landlord can lawfully 'distrain' on a tenant's goods for rent arrears - but you deny that you are his landlord!

 

A judgement creditor holding a valid county court judgement can instruct bailiffs to seize goods belonging to the judgement debtor; but if you have not sued him then you have no such right.

 

Any third party holding a court order against him might not be entitled to enter your land except with your permission, if he is genuinely a trespasser.

Edited June 28, 2011 by Ed999

[less2303]

Many thanks for your prompt reply.

 

I am 100% sure that there is no written contract with either our predecessor or the freehold owner.

 

Would a verbal agreement constitute a contract?

 

I think from what you have said, it would be best to treat him as a sub-tenant, as when we have taken the overall lease, we have done so knowing he was in the building, therefore implying we accept him as such, even though there is no mention in the tenancy agreement.

 

To be honest, we are resigned to the fact we probably wont get any of the monies owed, and just want him gone with the least amount of problems possible.

[mariner51]

I would advise the OP from regarding this 'occuoier' as a sub-tenant. Even if he had a valid sub-contract agreement with previous T, this would have ended when previous T departed and the LL, not informed of this agreement, let the whole premises with vacant possession and no mention of sub-T.

The 'occupier' seems to accept the game is up so the OP should allow him retrieve his property and leave. The occupier has no right to forcible entry to any building to which he has no right to enter.

Any creditor should seek legal remedy through the Court.

All this assumes:

OP has no sub T agreement with occupier. As such OP is not entitled to rent from occupier. IMO

We are talking about a Lease on a commercial unit

A verbal agreement could establish a Contract

[Ed999]

My advice is applicable only if the rented premises are entirely within England and Wales, and only if you were granted a lease or other form of tenancy (i.e. under which you have exclusive use of the premises) and you were over 18 years of age when the tenancy was granted.

 

 

I am 100% sure that there is no written contract with either our predecessor or the freehold owner.

 

Would a verbal agreement constitute a contract?

 

 

Yes, a tenancy is capable of being validly created, if verbal, provided that certain conditions are met.

 

An important condition is that the letting must either be periodic, i.e. rolling from month to month, or if it's for a fixed term then the term must be for not more than 3 years. There are certain requirements - that the lease must be granted in writing, by deed, with witnesses - if it's for more than 3 years.

 

Another important condition is that he must have taken up occupation, if the lease is created verbally, for the verbal agreement to be legally enforceable; that's an act of part performance. But clearly he has done that act.

 

 

I think from what you have said, it would be best to treat him as a sub-tenant, as when we have taken the overall lease, we have done so knowing he was in the building, therefore implying we accept him as such, even though there is no mention in the tenancy agreement.

 

 

If your immediate landlord has granted you a lease of the whole unit, your landlord could be sued by you for breach of contract if he has previously granted a valid lease of part of that same unit to someone else.

 

But that would be a last resort, only in the event of being unable to evict the sub-tenant.

 

 

To be honest, we are resigned to the fact we probably wont get any of the monies owed, and just want him gone with the least amount of problems possible.

 

Then your first course is to get hold of the solicitor who acted for you when you took the lease, explain the problem, and instruct the solicitor to contact the sub-tenant, to find out whether the latter claims to have a valid tenancy, and to find out who granted it.

 

If the sub-tenant has absconded, and cannot be found, and you have no other address for him, then you can't do much save issue a possession claim in the county court, for trespass, claiming possession and damages, and nail it to the part of the unit in question by way of service on him. Then you'll shortly have a court money judgement that might be enforced against his goods.

 

 

If you plan to simply repossess the part in question, without a court order, get advice from your solicitor first. If the sub-tenant has a genuine lease, there might be problems: it would be down to his actual landlord to forfeit his lease for non-payment of rent, and not something you could do. It involves a process called 'peaceable re-entry', while the premises are unoccupied; but only a landlord can do it.

 

If you find out who his immediate landlord is, the common law rules governing forfeiture by peaceable re-entry are summarised at:

 

• http://www.4rbusinessrecovery.co.uk/faq/?show=13

 

 

A Landlord who grants a lease reserves certain rights to himself in it normally, including the right to end the tenancy by forfeiting the lease, typically by peaceable re-entry, in the event of rent arrears arising. In exercising this right of re-entry the landlord typically does not commit an offence, provided no one lives at the premises - i.e. it's only available for business premises; and, in addition, the premises must be unoccupied at the time of the re-entry: if so, the landlord can re-enter the premises and change the locks. But you must obtain advice from a Solicitor: there are various technical legal requirements which the landlord might fall foul of.

 

A tenant can apply to a court for relief from forfeiture; but this needs a Solicitor's help, and usually requires payment of all the arrears of rent. Unless relief is granted by the court, the lease has ended. But in many situations, the rent ceases to run once the tenancy ends.

Edited June 30, 2011 by Ed999