Retail Lease - renewal term Q’s
Discussion
I have a retail bakery shop which we have leased from the local council for the last 20 years. No real issues during the various 5 year contracts. They were pretty basic contracts.
This renewal has seen an inclusion that when we return the property we must remove any alterations or upgrades, remove any chattels and make good. We should also return the property to the conditon required by this tenancy and the previous tenancy.
The issue is we have not made any significant changes to the property, but it is in a much better condition than when we inherited it. The majority of the chattels were already there when we bought it from the previous tenant. There is also no inventory or condition report from when we moved in.
So what is the condition it should be returned to if there is no records?
Can the landlord now impose a new clause like this?
How do I phrase the reply?
The likelihood is we will sell the business, so it may not be an issue. However I don’t want to sign something that may leave us liable for something that we don’t need to.
This renewal has seen an inclusion that when we return the property we must remove any alterations or upgrades, remove any chattels and make good. We should also return the property to the conditon required by this tenancy and the previous tenancy.
The issue is we have not made any significant changes to the property, but it is in a much better condition than when we inherited it. The majority of the chattels were already there when we bought it from the previous tenant. There is also no inventory or condition report from when we moved in.
So what is the condition it should be returned to if there is no records?
Can the landlord now impose a new clause like this?
How do I phrase the reply?
The likelihood is we will sell the business, so it may not be an issue. However I don’t want to sign something that may leave us liable for something that we don’t need to.
Is the lease protected by Part II of the 54 Act or Contracted Out? The former means you are entitled to a new lease on the same terms (other than the rent), and if the terms are different, the rent should be adjusted. Contracted out it's all fair game.
Also what is the repairing clause? Precise words matter.
To document the condition of the property, you would have needed a Schedule of Condition. Sounds like that horse has bolted.
At renewal, it's all up for discussion. But answers to the above will help.
Also what is the repairing clause? Precise words matter.
To document the condition of the property, you would have needed a Schedule of Condition. Sounds like that horse has bolted.
At renewal, it's all up for discussion. But answers to the above will help.
This is quite standard wording in a commercial lease. They are wanting you to return it to no worse than it may have been at the start of the lease and to remove the chattels, i.e. any business equipment/ shop fit that may not have been in place when the lease was agreed.
Although you may likely have acquired it as a going concern with the equipment in place, a commercial landlord isn’t going to be interested in that and will be wanting it returned to a shell finish or at least to a standard which would make re letting as simple as possible.
Although you may likely have acquired it as a going concern with the equipment in place, a commercial landlord isn’t going to be interested in that and will be wanting it returned to a shell finish or at least to a standard which would make re letting as simple as possible.
Ham_and_Jam said:
I have a retail bakery shop which we have leased from the local council for the last 20 years. No real issues during the various 5 year contracts. They were pretty basic contracts.
This renewal has seen an inclusion that when we return the property we must remove any alterations or upgrades, remove any chattels and make good. We should also return the property to the conditon required by this tenancy and the previous tenancy.
The issue is we have not made any significant changes to the property, but it is in a much better condition than when we inherited it. The majority of the chattels were already there when we bought it from the previous tenant. There is also no inventory or condition report from when we moved in.
So what is the condition it should be returned to if there is no records?
Can the landlord now impose a new clause like this?
How do I phrase the reply?
The likelihood is we will sell the business, so it may not be an issue. However I don’t want to sign something that may leave us liable for something that we don’t need to.
I am not a Surveyor but that sounds like a fairly standard Dilapidations clause. (I'm surprised it wasn't in there already tbh)This renewal has seen an inclusion that when we return the property we must remove any alterations or upgrades, remove any chattels and make good. We should also return the property to the conditon required by this tenancy and the previous tenancy.
The issue is we have not made any significant changes to the property, but it is in a much better condition than when we inherited it. The majority of the chattels were already there when we bought it from the previous tenant. There is also no inventory or condition report from when we moved in.
So what is the condition it should be returned to if there is no records?
Can the landlord now impose a new clause like this?
How do I phrase the reply?
The likelihood is we will sell the business, so it may not be an issue. However I don’t want to sign something that may leave us liable for something that we don’t need to.
Given that there are no historical records I would have thought the condition only applies with effect from the date of the new lease. So you should take your pictures NOW and that would be the condition you're required to reinstate the property to IYSWIM
soxboy said:
This is quite standard wording in a commercial lease. They are wanting you to return it to no worse than it may have been at the start of the lease and to remove the chattels, i.e. any business equipment/ shop fit that may not have been in place when the lease was agreed.
Although you may likely have acquired it as a going concern with the equipment in place, a commercial landlord isn’t going to be interested in that and will be wanting it returned to a shell finish or at least to a standard which would make re letting as simple as possible.
It is, but as it's a renewal, it may be arguable... If the OP returns.Although you may likely have acquired it as a going concern with the equipment in place, a commercial landlord isn’t going to be interested in that and will be wanting it returned to a shell finish or at least to a standard which would make re letting as simple as possible.
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