Commercial Property Lease - Legal Advice?
Discussion
Morning,
Looking for some advice regarding a situation I have found myself in, I don't think its going to be sorted easily but I figured at least if I got some advice on how things currently sit then I might have half a chance!
So I viewed a small industrial unit through a local estate agent back in March, it was with a view to renting it to start a small business; when I viewed the landlord also attended and introduced himself and we had a chat - so far so good. I decided to make a 'proposal' to the landlord via the agent based on the conversation we had had that day and also the details provided by the agent.
The proposal was accepted and so the wheels started in motion, from the outset the landlord made it quite clear this was all new to him and I advised him this was also new for me too. We discussed the 'heads of terms' and the landlord advised the drawing up of the tenancy would take sometime so in the interim he would obtain a 'tenancy at will' which would afford both parties some degree of protection whilst the full tenancy was being drawn up.
We had several conversations around what date we could take up the unit and out of the blue the landlord asked me to meet him at the unit to pick up keys, read the meter etc. as he had to go away on business. So in early April I met him he passed me a set of keys and we took a note of the meters. I asked on three separate occasions during that visit for him to provide me with bank details in order that I could transfer rent/deposit and set up a standing order for future payments. He advised the units was being managed by a 'SIPP' which I gather is some sort of trust he created for his kids, he told me that the SIPP would write to me directly with bank details etc. and no money was required to be transferred at this stage.
With the help of several friends and family I started cleaning, painting and preparing the unit ready to start trading.
Now the initial details i have state the unit is classified as B1/B8 use, my intended use would have probably slid into B8 but to be certain and do things the right way I submitted a pre-planning advice form to the local council. Basically advising them I was taking up residency, what we would be doing and obtaining their 'approval' if you like. This approval cost £150 and took several weeks to obtain.
At this point no tenancy or contract had been signed.
The council advised the unit had been advertised with incorrect uses and in fact due to a previous planning application made b the owner the B8 use had been overwritten meaning it was only B1 classified which we couldn't use. I brought this to the attention of the landlord and we had several discussions, I advised I wasn't going to sign the tenancy at will until this had been clarified. He then told me that the tenancy at will was only temporary for three months and had written into it a clause which said that either party could at anytime within those three months issue a weeks notice.
I was required to obtain planning permission for a change of use which was going to cost £350 and take 8 weeks, the landlord said if I signed the agreement and returned it we would have a planning decision before the 3 months expired and if we needed to leave we could serve our weeks notice - fair enough I thought so on 29th May I signed it and emailed the landlord a copy. It transpires that email never left my drafts folder for some reason so when I was chased I resent it immediately and dropped the hard copy at the solicitors.
Yesterday I received an email from his solicitor to say he altered the tenancy at will we had signed changing the date from 29th May to 7th July and also making some amendments to the effect of adding a clause into it regarding occupation since whatever the date was in April.
My concerns are clear - the solicitor has altered a contract we have signed without our approval or counter-signature and I really don't know how I stand with that?
Also we have to this day never received any request for payment, bank details or otherwise from this SIPP despite regular contact between the landlord and myself?
The planning looks like it is going to be un-succesful and after some long hard thinking I will most probably have to serve my notice at the end of this week as outlined in the tenancy at will (if its still valid!) and leave. That then leaves some questions around rent etc. what is payable from when?
I have spent quite a considerable amount in the unit decorating, sealing and painting the floor, additional electric sockets etc. which I realise I am going to have to leave behind but don't relish the thought of having to pay huge sums of rent for a unit I haven't been able to trade from.
I am pretty stressed about the whole thing to be honest and worried about what I will be left liable for, any advice would be most welcomed on this or even somewhere I can turn for advice??
Looking for some advice regarding a situation I have found myself in, I don't think its going to be sorted easily but I figured at least if I got some advice on how things currently sit then I might have half a chance!
So I viewed a small industrial unit through a local estate agent back in March, it was with a view to renting it to start a small business; when I viewed the landlord also attended and introduced himself and we had a chat - so far so good. I decided to make a 'proposal' to the landlord via the agent based on the conversation we had had that day and also the details provided by the agent.
The proposal was accepted and so the wheels started in motion, from the outset the landlord made it quite clear this was all new to him and I advised him this was also new for me too. We discussed the 'heads of terms' and the landlord advised the drawing up of the tenancy would take sometime so in the interim he would obtain a 'tenancy at will' which would afford both parties some degree of protection whilst the full tenancy was being drawn up.
We had several conversations around what date we could take up the unit and out of the blue the landlord asked me to meet him at the unit to pick up keys, read the meter etc. as he had to go away on business. So in early April I met him he passed me a set of keys and we took a note of the meters. I asked on three separate occasions during that visit for him to provide me with bank details in order that I could transfer rent/deposit and set up a standing order for future payments. He advised the units was being managed by a 'SIPP' which I gather is some sort of trust he created for his kids, he told me that the SIPP would write to me directly with bank details etc. and no money was required to be transferred at this stage.
With the help of several friends and family I started cleaning, painting and preparing the unit ready to start trading.
Now the initial details i have state the unit is classified as B1/B8 use, my intended use would have probably slid into B8 but to be certain and do things the right way I submitted a pre-planning advice form to the local council. Basically advising them I was taking up residency, what we would be doing and obtaining their 'approval' if you like. This approval cost £150 and took several weeks to obtain.
At this point no tenancy or contract had been signed.
The council advised the unit had been advertised with incorrect uses and in fact due to a previous planning application made b the owner the B8 use had been overwritten meaning it was only B1 classified which we couldn't use. I brought this to the attention of the landlord and we had several discussions, I advised I wasn't going to sign the tenancy at will until this had been clarified. He then told me that the tenancy at will was only temporary for three months and had written into it a clause which said that either party could at anytime within those three months issue a weeks notice.
I was required to obtain planning permission for a change of use which was going to cost £350 and take 8 weeks, the landlord said if I signed the agreement and returned it we would have a planning decision before the 3 months expired and if we needed to leave we could serve our weeks notice - fair enough I thought so on 29th May I signed it and emailed the landlord a copy. It transpires that email never left my drafts folder for some reason so when I was chased I resent it immediately and dropped the hard copy at the solicitors.
Yesterday I received an email from his solicitor to say he altered the tenancy at will we had signed changing the date from 29th May to 7th July and also making some amendments to the effect of adding a clause into it regarding occupation since whatever the date was in April.
My concerns are clear - the solicitor has altered a contract we have signed without our approval or counter-signature and I really don't know how I stand with that?
Also we have to this day never received any request for payment, bank details or otherwise from this SIPP despite regular contact between the landlord and myself?
The planning looks like it is going to be un-succesful and after some long hard thinking I will most probably have to serve my notice at the end of this week as outlined in the tenancy at will (if its still valid!) and leave. That then leaves some questions around rent etc. what is payable from when?
I have spent quite a considerable amount in the unit decorating, sealing and painting the floor, additional electric sockets etc. which I realise I am going to have to leave behind but don't relish the thought of having to pay huge sums of rent for a unit I haven't been able to trade from.
I am pretty stressed about the whole thing to be honest and worried about what I will be left liable for, any advice would be most welcomed on this or even somewhere I can turn for advice??
The SIPP is a Pension fund and it probably owns the building. This is not unusual. The SIPP is probably your landlord's pension but it is a separate legal entity to the person you have been dealing with, and unless he is the sole Trustee (unlikely), you should have had greater involvement from the SIPP Provider who will also be Trustees and required to co-sign all paperwork.
You will rent it from the Scheme Trustees, not him, on what ever basis is agreed. I would think they would take a dim view of any temporary arrangement given their regulatory obligations.
I am not sure why you are obtaining the change of use permission either, certainly not without the documented consent of the Trustees. I would view this as a landlord's obligation if they want their building let.
All in all it sounds less than ideal. Your exposure will (I would guess) be limited to whatever you have signed or paid for so far. Whether you could recover any costs in the vent you have to leave is for a legal opinion and IANAL.
Optimistically one might hope that a naïve first-time commercial landlord has realised SIPP owned commercial units are an even more cumbersome operation than conventionally owned ones, and the idea of getting some short-term cash flow has led him to make this deal with you, with the very best of intentions.
Pessimistically he's got someone to pay rent while his unit is refurbished by the tenant and now he can give you a week's notice. And the SIPP provider might not know anything about it - where have you been paying rent for this interim period?
It's probably all sortable, but a bit of legal advice up front would have made it a lot easier.
ETA sorry - I realise you haven't paid rent but are concerned about being on the hook for back rent to April. Solicitor changing a signed agreement?? Don't think so. Hope you have your copy still?
And who is the solicitor acting for? The bloke you have been dealing with or the SIPP Trustees? Because I would hazard a guess only the SIPP Trustees can offer what you're looking for - and it comes across as though this guy is trying to circumvent them. Take an hour's advice from a Commercial conveyancer - the best money you will spend this year probably!
You will rent it from the Scheme Trustees, not him, on what ever basis is agreed. I would think they would take a dim view of any temporary arrangement given their regulatory obligations.
I am not sure why you are obtaining the change of use permission either, certainly not without the documented consent of the Trustees. I would view this as a landlord's obligation if they want their building let.
All in all it sounds less than ideal. Your exposure will (I would guess) be limited to whatever you have signed or paid for so far. Whether you could recover any costs in the vent you have to leave is for a legal opinion and IANAL.
Optimistically one might hope that a naïve first-time commercial landlord has realised SIPP owned commercial units are an even more cumbersome operation than conventionally owned ones, and the idea of getting some short-term cash flow has led him to make this deal with you, with the very best of intentions.
Pessimistically he's got someone to pay rent while his unit is refurbished by the tenant and now he can give you a week's notice. And the SIPP provider might not know anything about it - where have you been paying rent for this interim period?
It's probably all sortable, but a bit of legal advice up front would have made it a lot easier.
ETA sorry - I realise you haven't paid rent but are concerned about being on the hook for back rent to April. Solicitor changing a signed agreement?? Don't think so. Hope you have your copy still?
And who is the solicitor acting for? The bloke you have been dealing with or the SIPP Trustees? Because I would hazard a guess only the SIPP Trustees can offer what you're looking for - and it comes across as though this guy is trying to circumvent them. Take an hour's advice from a Commercial conveyancer - the best money you will spend this year probably!
Edited by pacoryan on Tuesday 11th July 14:00
Thanks for the comprehensive reply Pacoryan, it is a right sorry series of events as it stands.
I understand now the SIPP aspect, he has set it up, I believe, for his children but has been involved from day one with negotiations etc.
Ultimately, I don't want to be charged back rent for a premises I haven't been able to use and wasn't under any form of Tenancy during that time. I am certainly not a freeloader and expecting something for nothing, but it was only on contacting the council the classification issue. came up which basically prevented me launching my business and trading.
I don't fall out with being liable for some rent, however I feel very uneasy that having returned the Tenancy At Will to the solicitor, he has now gone about changing it and amending it post our signing of it - doesn't seem correct practice?
The landlord had instructed the solicitor to act for him, albeit the SIPP is shown on the Tenancy.
Thanks for your help, I will google and see if I can find a local solicitor to take advice from as you suggest.
Thanks for your input.
Si
I understand now the SIPP aspect, he has set it up, I believe, for his children but has been involved from day one with negotiations etc.
Ultimately, I don't want to be charged back rent for a premises I haven't been able to use and wasn't under any form of Tenancy during that time. I am certainly not a freeloader and expecting something for nothing, but it was only on contacting the council the classification issue. came up which basically prevented me launching my business and trading.
I don't fall out with being liable for some rent, however I feel very uneasy that having returned the Tenancy At Will to the solicitor, he has now gone about changing it and amending it post our signing of it - doesn't seem correct practice?
The landlord had instructed the solicitor to act for him, albeit the SIPP is shown on the Tenancy.
Thanks for your help, I will google and see if I can find a local solicitor to take advice from as you suggest.
Thanks for your input.
Si
Paid advice is well advised.
Based on what you have written here....
You are not obliged to be bound by the altered agreement. Reply now to say that you do not agree with the alterations. Keep your copy!
Most industrial units are let with some sort of rent free. Do not feel guilt tripped into offering something. If your a beginner do take advice next time before agreeing terms.
I'm a tad confused at the Tenancy at Will stuff - it's not really compatible with the SIPP landlord. Financial Advisors rave about the tax efficient nature (and commission), but few properly explain the disadvantages...
You need to work out what you want from this... To my mind walking away should be quite simple at this stage.
Based on what you have written here....
You are not obliged to be bound by the altered agreement. Reply now to say that you do not agree with the alterations. Keep your copy!
Most industrial units are let with some sort of rent free. Do not feel guilt tripped into offering something. If your a beginner do take advice next time before agreeing terms.
I'm a tad confused at the Tenancy at Will stuff - it's not really compatible with the SIPP landlord. Financial Advisors rave about the tax efficient nature (and commission), but few properly explain the disadvantages...
You need to work out what you want from this... To my mind walking away should be quite simple at this stage.
SiT said:
...I feel very uneasy that having returned the Tenancy At Will to the solicitor, he has now gone about changing it and amending it post our signing of it - doesn't seem correct practice?
Subsequent amendment of a tenancy/lease is not unusual. However it cannot be unilateral: without your agreement and signature to the amendments the latter will be of no effect.surveyor said:
You are not obliged to be bound by the altered agreement. Reply now to say that you do not agree with the alterations. Keep your copy!
^^This^^I really do hope the OP has a signed copy of the original document.
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