Shop rent

[couresportivo]

I have a small shop, which is halfway through a 20 year, full repairing and insuring lease. With upward only rent reviews.

 

I currently pay £14,000 per year rent. There are a number of empty shops around me and for the same size the rent offered are £8,000 pa on similar size properties.

 

Things have become very tough and I now find this rent difficult to pay. Has anybody any ideas, other than agreeing with the landlord, who will not renegotiate.

 

thanks

[mariner51]

When is your next rent review scheduled?

What penalties if you cease trading?

 

Are you a member of a local business group or similar

[couresportivo]

Tks for reply.

 

Last period for rent increase was 2 months ago, although javent agreed renewal with landlord. rent just continuing. I guess penalties if i cease trading will be being personally pursued by landlord.

 

not a member of any group.

 

I think I am on a loser here, just continue to pay and work for nothing, or cease trading and expect to be pursued. It is very tough

[ashmk]

Speak to the landlord, tell them you need to negotiate new terms or you will have no choice but to cease trading. The landlord will prefer something rather than nothing and if you cease trading he/she knows it's going to be a hard job getting someone new in which will leave them with nothing.

People do budge when the threat of nothing comes their way.

[couresportivo]

Landlord only bought last year at auction and in my view paid too much. He wont give an inch and i think he will persue me for the rent.

[renegadeimp]

Sounds like he thinks he's on to easy money, as you have already said, there are other properties of similar design for much less rent, yet his is almost double.

[The Carpet Cleaners]

surely there must be get out clauses on a regular basis?? No one can be expected to sign a full 20 year lease on a shop without some clause to get out if the business is not going as well as it should?

 

Is there nothing at all that can be used?

[couresportivo]

There is no break clause. your are reliant upon the good will of the landlord. and if there isnt any, they come after you for the rent

[renegadeimp]

Theres something not quite right there. Youre basically saying that youa re locked into a 20 year lease, and the landlord can up the rent as much as he likes, and as often as he likes. I'm pretty sure there are some rules and regulations to stop that kind of thing from happening.

[couresportivo]

No there are rent reviews every three years

 

Upwards only. It is wrong but it is a commercial contract I agreed to when things were better. This is a very common lease problem.

[ashmk]

Why not post the contract on here, deleting any personal information and some of the legal bods might look it over for you. But from what your saying it's very unfair and unfair contracts often get thrown out by the courts.

[The Carpet Cleaners]

I think that it sounds far too one sided, to get any credence should things go to court, and was going to suggest the same Ash..

[mariner51]

I suggest there is a tech implicit break clause on every rent review date, either accept proposed rent or surrender Lease, subject to other contractual requirements for surrender eg finding another T to take on existing Lease.

If Lease was taken by a PLC, then LL would find it hard to pursue rent debt for remaining Term if Co entered Receivership etc. An individual/sole trader may have to be declared bankrupt or take out an IVA to avoid some of the ongoing rent debt.

The current Contract appears inequitable , biased in favour of LL only.

Either way, OP should expect some financial pain.

IANAL

Edited August 4, 2012 by mariner51

[couresportivo]

#thanks all for responses, unfortunately I concur with mariner51. But bankruptcy not for me as I could lose some property.

 

Was just being hopeful, that somebody knew a way out.

[assisted blonde]

Can you reassign the lease to someone else?

[couresportivo]

Yes of course the lease can be assigned. But who wants a business earning nothing, or an empty shop with a rent more than the open market rent.

[assisted blonde]

I was just thinking that if you could get someone to pay some of the current rent to lease the shop and you were employed elsewhere and made up the difference then you would actually be financially in a better position than carrying on where you are and just working to pay the rent.

What type of business is it? can the shop be used for a different type of business just because you earn nothing there someone else might, it was just a thought.