Sole trader recently had to dissolve business, tied into lease, need help with Landlord chasing me for rent

[vineesworld]

Hi, Please can anyone give me advice on what to do.

 

I was a sole trader and bought an ongoing business (sandwich bar & Coffee shop) in 2007. However in March 2013 i had to make the difficult decision to close the shop up and dissolve the business due to the recession and health issues. But I am still tied into a long lease. The agents representing the Landlord (Bournemouth University) are now hounding me for rent on the shop and the council are requesting continued payment for rates and Bournemouth Bid Levy, money i just do not have.

 

I am now un employed and having to claim benefits. I own my home and pay a mortgage and I am terrified that the Landlord and council will try to get me to sell my home as this is where my assets are.

I am aware that the landlord will do everything in their power to try to get me to pay rent, and im worried that because i have assets in my home, can they take my home away from me.

 

I am prepared to go to court over this, I a not a criminal and did not wish this to happen, i tried everything to avoid going bust, but my losses in the business were getting worse and i could not continue to tade..

 

does anyone have any advice

 

thanks

 

Vince

[sequenci]

Hi Vince. Welcome to CAG.

 

Am I absolutely correct in saying that the business was set up as a sole-trader rather than a limited company?

How much equity have you in the property?

How much is the outstanding liability?

 

Best wishes,

 

Seq.

[vineesworld]

Hi Seq,

Yes I was a sole trader, and NOT a limited company.

It was a leasehold property and , I'm not sure what you mean by how much equity i had in the property, I just left all the equipment i had in the shop and closed the doors, the equipment did not not amount to much is monetary terms.

When you ask, how much is the outstanding liability, do you mean how long was remaining on the lease.

[sequenci]

Yes. How long did you have left - and how much was the lease?

How much equity is there in your home?

[vineesworld]

There is still 12 years remaining on the lease.

the rent was just over £1400 pcm payable in quarterly periods, so each quarter i had to pay £4212.50

I'm not quite how much equity i have in my home,

[vineesworld]

I failed to mention that in 2007 the Landlord took a £8000.00 deposit which they still have against the lease

[ericsbrother]

The law says you are responsible for the lease so you should do everything you can to find someone to take over the business and assign the lease if that is possible. As for the business rates, since the premises has all of the equipment to make it a commercial premises then the council can chase you for that. See if you were charged the correct business rates as there are incentives and reductions for small businesses with just 1 premises.

Now, is you house in joint names or just yours? If owned jointly seek advice on limiting any charge placed on the property being on your share only. That will depend on whether the property is a joint tenancy or tenancy in common and if the latter what share is your share. It will be on the deeds.

[steampowered]

Are you entitled to sub-lease under the current lease agreement?

 

If you are not entitled to sub-lease, landlord will be under a duty to mitigate his loss by renting to someone else and you will be liable for any shortfall.

 

If you were entitled to sub-lease, recent case law suggests that landlord is NOT under a duty to mitigate his loss on the basis that it is your responsibility to find a sub-tenant. If this is the case then simply handing back the keys would be unwise, and you need to think about negotiating with the landlord and/or trying to find a sub-tenant to take over the lease.

[raydetinu]

Is there anything in the lease about early surrender?

You really need to negotiate your way out if you can.

suggest you see a solicitor specialising commercial contracts, leases etc.

[vineesworld]

Yes I have tried that, i tried to negotiate a get out clause through a solicitor with no success..I cannot afford a solicitor, i lost the business in the first place due to continued losses and tesco opening up nearby, and of course the economic climate we are in.I feel i will have to go to court.

[steampowered]

Before letting this go to court, have you checked (1) what the lease says about surrender and (2) whether you are permitted to sub-lease?

 

If you are permitted to sub-lease, you should think about trying to arrange this ASAP. Don't just assume that the landlord will do it. Longer you leave it the more expensive a court case would be.