Office rental terms & conditions
Discussion
I've recently discovered that a contract I signed around 12 months ago which is away to expire and was described (orally) as a 12 month minimum contract at the time has a few unexpected clauses and we may have to give 3 months notice rather than ending it at the end of a fixed term as expected. It's for the rental of an office in a serviced office complex and I have new premises sorted out to move into.
Firstly, I understand what's written in the contract is what we have legally agreed to (although it is not in the spirit of how the contract was signed) and I am a lot more savvy having spent some time researching this so while I'm open to criticism I'd rather it was constructive and on topic. I did read the contract before signing and this is a case of something not being quite as initially expected/understood.
Having expected to be entering into a rental agreement, I expected there to be a fixed period followed by a rolling contract as is normal when renting. I recently discovered that in our licence there is an 'initial period' (which is what I had previously thought was the fixed rather than minimum period) where effectively notice cannot be given and then the contract ends upon us giving 3 months notice.
The contract states that 'nothing in this licence shall create the relationship of landlord and tenant' which seems to contradict the nature of renting a room from them but is obviously done to prevent their clients getting some statuatory rights and may well be in keeping with it being a licence rather than a lease or similar. It does seem odd however that we have had to apply for rates relief rather than the centre taking care of this/paying them as you would think that would make us a tenant of the property, or to approach it from the opposite side, you might think the office company would pay the rates if we are only licenced to use their premises and they are in fact the occupiers.
I am wondering such things as if there is a case to be made in relation to the office rental company trying to defeat the 'security of tenure' and whether a licence can be created to include a period where notice cannot be given? I'd appreciate your thoughts as I am looking at giving them around a month's notice before the end of the inital period. It's in Scotland and determined by Scot's Law if that makes any difference.
Firstly, I understand what's written in the contract is what we have legally agreed to (although it is not in the spirit of how the contract was signed) and I am a lot more savvy having spent some time researching this so while I'm open to criticism I'd rather it was constructive and on topic. I did read the contract before signing and this is a case of something not being quite as initially expected/understood.
Having expected to be entering into a rental agreement, I expected there to be a fixed period followed by a rolling contract as is normal when renting. I recently discovered that in our licence there is an 'initial period' (which is what I had previously thought was the fixed rather than minimum period) where effectively notice cannot be given and then the contract ends upon us giving 3 months notice.
The contract states that 'nothing in this licence shall create the relationship of landlord and tenant' which seems to contradict the nature of renting a room from them but is obviously done to prevent their clients getting some statuatory rights and may well be in keeping with it being a licence rather than a lease or similar. It does seem odd however that we have had to apply for rates relief rather than the centre taking care of this/paying them as you would think that would make us a tenant of the property, or to approach it from the opposite side, you might think the office company would pay the rates if we are only licenced to use their premises and they are in fact the occupiers.
I am wondering such things as if there is a case to be made in relation to the office rental company trying to defeat the 'security of tenure' and whether a licence can be created to include a period where notice cannot be given? I'd appreciate your thoughts as I am looking at giving them around a month's notice before the end of the inital period. It's in Scotland and determined by Scot's Law if that makes any difference.
You would need to post up the wording of the contract to get a definitive answer, but I would think that if you wanted the contract to expire exactly after 12 months you would need to serve notice at 9 months.
If you serve notice now the contract will terminate in 3 months providing that is after the 12 month anniversary.
If you serve notice now the contract will terminate in 3 months providing that is after the 12 month anniversary.
PurpleMoonlight said:
You would need to post up the wording of the contract to get a definitive answer, but I would think that if you wanted the contract to expire exactly after 12 months you would need to serve notice at 9 months.
If you serve notice now the contract will terminate in 3 months providing that is after the 12 month anniversary.
I want to avoid doing that as I don't want anybody to go to great lengths to help me out but I can put the 3 pages of the licence of the agreement up with certain information redacted if that makes it easier. With respect to that specific issue it states:If you serve notice now the contract will terminate in 3 months providing that is after the 12 month anniversary.
"Initial Licence Period:
7 months from 02/03/2015 (this is because we changed to a larger room after 5 months)
Notice Period Thereafter: 3 months"
therefore notice can't actually be given yet.
PurpleMoonlight said:
Yes you can post up a copy with the personal details removed.
If they are claiming you cannot serve notice until the 12 months have expired and then it must be 3 months they have in effect created a minimum 15 month contract.
I'll see about putting it up then. The problem is it doesn't state in writing anywhere that it is a 12 month minimum contract, that's just what I was told when signing it, i.e. I was asked what I wanted the minimum term to be and was given choices, one of which being 12 months. The contract was then written up and sent to us for signing.If they are claiming you cannot serve notice until the 12 months have expired and then it must be 3 months they have in effect created a minimum 15 month contract.
![](http://thumbsnap.com/sc/yXNIIX7E.jpg[/img]</a> <a href="http://thumbsnap.com/ZUBFubuQ" Target="_blank">[img]http://thumbsnap.com/sc/ZUBFubuQ.jpg[/img]</a> <a href="http://thumbsnap.com/dunzMpJE" Target="_blank">[img]http://thumbsnap.com/sc/dunzMpJE.jpg)
In addition to that I have an email (albeit regarding the first contract we signed) stating the 12 month nature of the contract:
Thank you for taking the time to visit our Centres in XXXXXXX today. It was good to meet you both and hear of your plans.
Please find below confirmation of the room at XXXXXXXX that would be suitable for you and also the container
Room 11 at £185.00 per month plus Vat
Container at £95.00 per month plus Vat
A deposit of £185.00 is payable to secure the office
A deposit of £95.00 is payable on the container
The first months rent is due in advance of moving in
The room will be available from 01st October
This price is based on a 12 month agreement and confirming your decision to take the room by Monday 8th September
Please let me know if there is any further information you need at the moment
This exact situation happened to a recruitment business I was a NED for. Luckily they managed to sell the space on really easily within a month, which is what I'd suggest you to do.
Couldn't read the contract as I'm on an iPhone so can't give exact advice, but expect their position to be legally binding.
Couldn't read the contract as I'm on an iPhone so can't give exact advice, but expect their position to be legally binding.
foliedouce said:
This exact situation happened to a recruitment business I was a NED for. Luckily they managed to sell the space on really easily within a month, which is what I'd suggest you to do.
Couldn't read the contract as I'm on an iPhone so can't give exact advice, but expect their position to be legally binding.
that would also be my preferred option (ETA the licence does prevent me doing this). In regards to the position on the contract being legally binding, one thing I have discovered is that nowhere does it state the fee is paid monthly, it simply states the length of the fixed period of the contract and a single price (which is obviously the agreed monthly price) with no frequency of payments mentioned. While I'm sure they didn't understand their agreement to 7 months rent only costing £444, neither did I understand that I was agreeing to a fixed period without a notice period. I have paid them the fee monthly but just going by what's on the paper, I'm sure there should be a bit of room for negotiation with the landlord on a purely contractual basis where if we didn't agree it would be disadvantageous to both parties.Couldn't read the contract as I'm on an iPhone so can't give exact advice, but expect their position to be legally binding.
Edited by ModernAndy on Tuesday 29th September 19:35
Termination of the Licence is in clause 9 a.
It is ambiguous and I had a very similar clause in a serviced office contract I once had. I read it as you only need to give 3 months notice if you continue in occupation past the initial term. I challenged my landlord to sue me if they felt the clause was sufficient to rely on for a further three months rent and they never did.
This all seems somewhat mute though as your initial term ends tomorrow so unless you are able to vacate by them you are liable to serve 3 months notice if you remain in occupation.
However, given that your landlord has the right to seek to relet if you vacate early and has the obligation to try to do so to mitigate their loss anyway, they are unlikely to sue you I feel.
It is ambiguous and I had a very similar clause in a serviced office contract I once had. I read it as you only need to give 3 months notice if you continue in occupation past the initial term. I challenged my landlord to sue me if they felt the clause was sufficient to rely on for a further three months rent and they never did.
This all seems somewhat mute though as your initial term ends tomorrow so unless you are able to vacate by them you are liable to serve 3 months notice if you remain in occupation.
However, given that your landlord has the right to seek to relet if you vacate early and has the obligation to try to do so to mitigate their loss anyway, they are unlikely to sue you I feel.
PurpleMoonlight said:
Termination of the Licence is in clause 9 a.
It is ambiguous and I had a very similar clause in a serviced office contract I once had. I read it as you only need to give 3 months notice if you continue in occupation past the initial term. I challenged my landlord to sue me if they felt the clause was sufficient to rely on for a further three months rent and they never did.
This all seems somewhat mute though as your initial term ends tomorrow so unless you are able to vacate by them you are liable to serve 3 months notice if you remain in occupation.
However, given that your landlord has the right to seek to relet if you vacate early and has the obligation to try to do so to mitigate their loss anyway, they are unlikely to sue you I feel.
I read it as the last day of the initial period being the 2nd of October but that's still a bit soon as the new place isn't ready just yet.It is ambiguous and I had a very similar clause in a serviced office contract I once had. I read it as you only need to give 3 months notice if you continue in occupation past the initial term. I challenged my landlord to sue me if they felt the clause was sufficient to rely on for a further three months rent and they never did.
This all seems somewhat mute though as your initial term ends tomorrow so unless you are able to vacate by them you are liable to serve 3 months notice if you remain in occupation.
However, given that your landlord has the right to seek to relet if you vacate early and has the obligation to try to do so to mitigate their loss anyway, they are unlikely to sue you I feel.
I've come up with this:
"Dear Sirs,
I write to resolve a potential issue in regards to the license to occupy Room 5, as addressed above.
Due to the licence initially being described as a minimum 12 month contract (albeit the room was changed after 5 months and the 12 months in the initial contract was revised down to an extra 7 so the overall contract would be no greater in duration in the second contract signed), it was my understanding that my license to occupy Room 5 was a fixed term that naturally came to an end on the 2nd of October 2015, with the option to continue on the basis that 3 months’ notice was given thereafter.
During conversation with yourselves, when enquiring about bringing the license to an end, it was brought to my attention that in fact the notice period is 3 months regardless and can only be given on or after the 3rd of October 2015. This is reflected in the terms and conditions on the license to occupy. This essentially brings the minimum term of occupation to 10 months rather than 7 (or 15 rather than 12 in our initial contract).
This was not my understanding of the license at the time, and although on further inspection of the license terms it is stated so, I do not believe this is the spirit of what was verbally agreed and understood at the time. As such I would like to formally request that the license be ended 31 days from now on the 31st of October 2015.
Although it is the responsibility of both parties to understand the license, I believe that the written and signed license is unfit for both parties in regards to the spirit in which it was signed. As such, I believe that there is room to be flexible in regards to my request. Specifically, I would like to bring to your attention that the total amount due for the 7 month period, from the 2nd of March to the 2nd of October, is clearly stated as totalling £444 inc. Vat and fees. I am sure you would agree that you did not agree to this fixed price, however, this is what the license terms clearly state.
As such, I would appreciate it if you would accept a termination date, for this license to occupy, of the 31st of October 2015– in agreement with the spirit in which the license was made and allowing a month’s notice in accordance with the norms of giving notice to leave a rented premises at the end of a fixed period. Alternatively, I would be happy to stick to the terms of the agreement in its entirety and I look forward to the refund of overdue fees that, by the 2nd of October 2015, will have totalled £2,664.
I hope we can come to an amicable, reasonable, and mutually beneficial agreement.
Please regard this as a notice to quit.
Kind regards,
me"
"Dear Sirs,
I write to resolve a potential issue in regards to the license to occupy Room 5, as addressed above.
Due to the licence initially being described as a minimum 12 month contract (albeit the room was changed after 5 months and the 12 months in the initial contract was revised down to an extra 7 so the overall contract would be no greater in duration in the second contract signed), it was my understanding that my license to occupy Room 5 was a fixed term that naturally came to an end on the 2nd of October 2015, with the option to continue on the basis that 3 months’ notice was given thereafter.
During conversation with yourselves, when enquiring about bringing the license to an end, it was brought to my attention that in fact the notice period is 3 months regardless and can only be given on or after the 3rd of October 2015. This is reflected in the terms and conditions on the license to occupy. This essentially brings the minimum term of occupation to 10 months rather than 7 (or 15 rather than 12 in our initial contract).
This was not my understanding of the license at the time, and although on further inspection of the license terms it is stated so, I do not believe this is the spirit of what was verbally agreed and understood at the time. As such I would like to formally request that the license be ended 31 days from now on the 31st of October 2015.
Although it is the responsibility of both parties to understand the license, I believe that the written and signed license is unfit for both parties in regards to the spirit in which it was signed. As such, I believe that there is room to be flexible in regards to my request. Specifically, I would like to bring to your attention that the total amount due for the 7 month period, from the 2nd of March to the 2nd of October, is clearly stated as totalling £444 inc. Vat and fees. I am sure you would agree that you did not agree to this fixed price, however, this is what the license terms clearly state.
As such, I would appreciate it if you would accept a termination date, for this license to occupy, of the 31st of October 2015– in agreement with the spirit in which the license was made and allowing a month’s notice in accordance with the norms of giving notice to leave a rented premises at the end of a fixed period. Alternatively, I would be happy to stick to the terms of the agreement in its entirety and I look forward to the refund of overdue fees that, by the 2nd of October 2015, will have totalled £2,664.
I hope we can come to an amicable, reasonable, and mutually beneficial agreement.
Please regard this as a notice to quit.
Kind regards,
me"
PurpleMoonlight said:
It's licence not license.
A 7 month term commencing on 2nd March ends on 1st October.
If you are seeking to appeal to their better nature you are going about it incorrectly in my opinion.
Thanks for clearing that up. It really is a bit of a frustrating situation as I have already had words with staff and essentially their position is that it's 3 months notice regardless of anything else and they won't make any accommodation with regard to finding another tenant to take the room in that time.A 7 month term commencing on 2nd March ends on 1st October.
If you are seeking to appeal to their better nature you are going about it incorrectly in my opinion.
This is particularly annoying as we agreed a 12 month fixed term and we have an application for a 12 month agreement in writing which is why the initial period was considered by myself to be the fixed period as would be normal with a lease or rental agreement.
While the fixed term, if it does exist, will mean our tenancy runs out tomorrow, we are obliged to give at least a month's notice anyway (as a statuatory requirement of a rental contract- I now understand a licence is treated as a lease in Scot's law) and since the fixed period is still in effect till tomorrow, I believe the law is on our side if we serve a notice to quit by then.
I've already tried to appeal to their better nature. I am of course open to suggestions to improve the letter I've drafted and I'm very grateful for your help so far.
I'd love to help and if it was England would happily do so. As it's foreign law, I'm out....
I'm not aware of any Scottish property lawyers and/or Surveyors and I suspect you may need some proper advice...
I also suspect that you are bang to rights OP, but that's an educated guess rather than a fact.
I'm not aware of any Scottish property lawyers and/or Surveyors and I suspect you may need some proper advice...
I also suspect that you are bang to rights OP, but that's an educated guess rather than a fact.
I've had a word with an expert and in essence it would seem that what's on the contract is what is binding but that also means that regardless of payments made to them so far, the payment agreed in the contract is the one that stands under law and I should be due back overpayments if they do want to go by the contract. It would therefore be advantageous for them to take a month's notice from me rather than going by what is written in the contract.
You want to argue that the contract states £370 for a 6 months Licence and you are therefore legally due a refund of 5 months rent that you have been invoiced for and happily paid, because you want out of the contract with one months notice and not three?
Good luck with that.
Why not just accept the consequences of your actions and failure to understand the contract and stop trying to steal from the landlord.
Good luck with that.
Why not just accept the consequences of your actions and failure to understand the contract and stop trying to steal from the landlord.
ModernAndy said:
I've had a word with an expert and in essence it would seem that what's on the contract is what is binding but that also means that regardless of payments made to them so far, the payment agreed in the contract is the one that stands under law and I should be due back overpayments if they do want to go by the contract. It would therefore be advantageous for them to take a month's notice from me rather than going by what is written in the contract.
What qualifications does your expert have, as that's not what would happen in England as far as I'm aware - IANAL? You also seem to be getting hung up on 1 months notice. Again in England, that relates to residential property not commercial property - the law is totally different between resi and commercial.Gassing Station | Business | Top of Page | What's New | My Stuff