Commercial property leases.
Discussion
Ok two quick questions please.
1) What would you do if a company offered you a 5 year lease than a few months later changes that to a 15 year lease before you've signed any sort of contract yet. By there being a 15 year lease I would be liable to rents for that period even if I have sold the business on to someone else and they subsequently f-off, Right.
2) Does anybody have experience of on how to find out or how to prove how long a 'business' has been in operation. If the landlord doesn't know, all I can think of is our water company. Also, how abouts do you go about proving that the business has been trading for that long. I've been told to go about the neighbouring business and asking for statements from them.
Thanx for any help.
1) What would you do if a company offered you a 5 year lease than a few months later changes that to a 15 year lease before you've signed any sort of contract yet. By there being a 15 year lease I would be liable to rents for that period even if I have sold the business on to someone else and they subsequently f-off, Right.
2) Does anybody have experience of on how to find out or how to prove how long a 'business' has been in operation. If the landlord doesn't know, all I can think of is our water company. Also, how abouts do you go about proving that the business has been trading for that long. I've been told to go about the neighbouring business and asking for statements from them.
Thanx for any help.
qwertyford said:
Ok two quick questions please.
1) What would you do if a company offered you a 5 year lease than a few months later changes that to a 15 year lease before you've signed any sort of contract yet. By there being a 15 year lease I would be liable to rents for that period even if I have sold the business on to someone else and they subsequently f-off, Right.
Law on liability after assigning your lease has now changed. However do get legal advice to confirm the exact postition. As regards the other issue you need to either walk away or offer less rent. Mind you someone else might want it hance the change
On 1), if they want you to take a 15 year lease, ask for break options every 5 years, or if they won't, walk away from the deal. Unless massive incentives are given at the start of the lease eg long rent free period, large reverse premium etc, no-one in my recent experience signs a lease without breaks for such a long period these days.
The Londoner said:
On 1), if they want you to take a 15 year lease, ask for break options every 5 years, or if they won't, walk away from the deal. Unless massive incentives are given at the start of the lease eg long rent free period, large reverse premium etc, no-one in my recent experience signs a lease without breaks for such a long period these days.
I would back this up. There is a major advantage for the landlord in getting a fifteen year deal. Ask for the breaks and also chip for a rent free period at the beginning of the term - probably about six months.
The liability issue is a bit complex. Basically a tenant is liable for their period of ownership and can be required to guarantee that their immediate successor will comply with the lease as well. So if A transfer the lease to B who then tranfers to C then A is liable if B defaults and B is liable if C defaults. A can't be required to pay if C doesn't.
It hasn't been mentioned in the previous posts but a fifteen year lease also raises issues over rent review. Traditionally these have been upward only every five years but there is pressure on the industry to offer alternatives such as upward/downward or RPI linked.
Any lease really needs expert legal advice. It's money well spent.
Gassing Station | Business | Top of Page | What's New | My Stuff