Commercial lease - non paying tenant

[orbit123]

Hi,
needing some advice on a non-paying tenant on a commercial lease (office premises in Scotland). Getting some legal advice but would also appreciate some real world advice if anyone has any experience.

Tenant is about 3 months behind and also owes substantial amounts relating to service charges and telephone charges (which are re-billed) - all in about £10k. We've let it run on longer than we should, hoping for the best really. Its looking more and more like tenant is experienced in running up bills and moving, starting under a new company name etc. Bit of digging and can see they've changed company name several times, have multiple companies with similar names etc - kind of thing that makes you feel ill as you read it.

Solicitor is advising we serve a 14 day charge which states unless they pay-up then we can terminate the lease. After that point we would need to start an eviction proceeding if they don't move out which could take months. My concern is that this is all part of their plan and that they'll be able to stay in there rent free for months, move, wind-up their company (or one of their creditors will do that) and start again.

Do feel like the solicitors just follow the standard course (which is exactly what these crooks expect) when there might be alternative options open to us. I had looked, for example, at wrongful trading as they've continued to rent the property from us whilst the company that holds the lease seems to have no income (one of their other companies actually seems to be generating the money). Seems like other companies they’ve run are under investigation, there has been sheriff’s officers round etc. They’re not paying because they’re decent folk who’re having cash-flow problems, I’m certain of that.

Plenty lessons learned - should have taken personal guarantees, should have taken more heed of their lack of history etc but they paid fine for over a year on a month to month lease before entering their current 5 year one.

Anyway, if current course (14 day charge then evict) is pretty much the only route then happy to accept that but any general advice would be greatly appreciated as we’re feeling a bit out of our depth.

Thanks.

[skwdenyer]

orbit123 said:

Hi,
needing some advice on a non-paying tenant on a commercial lease (office premises in Scotland). Getting some legal advice but would also appreciate some real world advice if anyone has any experience.

Tenant is about 3 months behind and also owes substantial amounts relating to service charges and telephone charges (which are re-billed) - all in about £10k. We've let it run on longer than we should, hoping for the best really. Its looking more and more like tenant is experienced in running up bills and moving, starting under a new company name etc. Bit of digging and can see they've changed company name several times, have multiple companies with similar names etc - kind of thing that makes you feel ill as you read it.

Solicitor is advising we serve a 14 day charge which states unless they pay-up then we can terminate the lease. After that point we would need to start an eviction proceeding if they don't move out which could take months. My concern is that this is all part of their plan and that they'll be able to stay in there rent free for months, move, wind-up their company (or one of their creditors will do that) and start again.

Do feel like the solicitors just follow the standard course (which is exactly what these crooks expect) when there might be alternative options open to us. I had looked, for example, at wrongful trading as they've continued to rent the property from us whilst the company that holds the lease seems to have no income (one of their other companies actually seems to be generating the money). Seems like other companies they’ve run are under investigation, there has been sheriff’s officers round etc. They’re not paying because they’re decent folk who’re having cash-flow problems, I’m certain of that.

Plenty lessons learned - should have taken personal guarantees, should have taken more heed of their lack of history etc but they paid fine for over a year on a month to month lease before entering their current 5 year one.

Anyway, if current course (14 day charge then evict) is pretty much the only route then happy to accept that but any general advice would be greatly appreciated as we’re feeling a bit out of our depth.

Thanks.

I can't directly comment on Scottish law in this area. Depending upon what is written in the lease, in England you can just serve the required notice, declared the lease "determined" (ended), and change the locks / board up the premises / etc without going to court.

Hopefully somebody with a Scottish legal head on will be along shortly to advise.

[V8mate]

orbit123 said:

Bit of digging and can see they've changed company name several times, have multiple companies with similar names etc - kind of thing that makes you feel ill as you read it.

Aren't you supposed to do those kind of checks before tenants move in?

orbit123 said:

Do feel like the solicitors just follow the standard course (which is exactly what these crooks expect) when there might be alternative options open to us.....
They’re not paying because they’re decent folk who’re having cash-flow problems, I’m certain of that.

So which are they?

[orbit123]

Sorry, poorly contructed ramblings - I meant they're not decent folk with cash-flow problems, they're simply working the system. I know where I am with folk that can't pay because times are tough and have a degree of sympathy.

Yes, I should have done the investigative journalist part before letting them take the lease. They have multiple lines of business though and the company lease was with all checked out ok at the time + they'd been paying rent on a month to month basis for well over a year without issue.
Like I said, know exactly what I should have done but really need advice on what options are now.

thanks.

[skwdenyer]

orbit123 said:

Sorry, poorly contructed ramblings - I meant they're not decent folk with cash-flow problems, they're simply working the system. I know where I am with folk that can't pay because times are tough and have a degree of sympathy.

Yes, I should have done the investigative journalist part before letting them take the lease. They have multiple lines of business though and the company lease was with all checked out ok at the time + they'd been paying rent on a month to month basis for well over a year without issue.
Like I said, know exactly what I should have done but really need advice on what options are now.

thanks.

Well, what does the lease say you can do? Perhaps you could quote the relevant clauses?

[Chrisgr31]

Rather than going down the eviction under the lease route which could be protracted what about checking thje phone contract. COuld be easiest just to cut it off if the bill hasn't been paid!