Buying a commercial property with a tenant

[AB]

My memory of L&TA 1954 is somewhat hazy, but I am looking at buying a commercial property currently let as a cafe/garden for my own use.

My question primarily is what do I need to consider in removing the tenant? I was under the impression that you can serve notice if you plan to use it for your own business use? Or can the current owner serve notice on the basis that he's selling?

If neither of these is true and my memory is incorrect on both counts, it's probably a non-starter if I can't get them to leave until the end of their lease.

[JQ]

AB said:

My memory of L&TA 1954 is somewhat hazy, but I am looking at buying a commercial property currently let as a cafe/garden for my own use.

My question primarily is what do I need to consider in removing the tenant? I was under the impression that you can serve notice if you plan to use it for your own business use? Or can the current owner serve notice on the basis that he's selling?

If neither of these is true and my memory is incorrect on both counts, it's probably a non-starter if I can't get them to leave until the end of their lease.

When is the lease expiry, because you won't be able to get them out at all until that point. And when lease expiry does occur you can't use Ground (g) (own occupation) of the Act if you've owned the building for less than 5 years. So you won't be able to get them out.

And the vendor won't be able to use Ground (g) either as they don't intend to occupy. As such, unless any of the other conditions are met to refuse renewal and the lease is inside the Act, you won't be able to get them out and they'll have the legal right of renewal. At that point the only option would be to offer a surrender premium.

Sounds like a non-starter.

[ozzuk]

Have a chat with the tenant, if the business is struggling they may welcome early termination. If the business is flourishing it would be pretty bad to try and take away someone's livelihood.

[AB]

They're difficult tenants by all accounts, hence the current owner wanting to get shut. I don't think they've done anything with clear grounds to serve notice but late payment of rent regularly albeit it it does turn up.

Maybe it's a non-starter. Maybe I need to go into business with the current owner which would then give him the grounds of his own business use?

[JQ]

Persistent late payment of rent is a ground for non-renewal. However courts tend to not like putting people out of business, so I suspect it'd have to be pretty severe, plus it would need to be the vendor getting them out and it is unlikely to be quick. Could be worth a chat with a specialist solicitor to see how viable disputing renewal would be, but if the vendor had the desire and ability to get them out they'd have done so already.

The purchase price would have to be very cheap to make it worth the agro in my eyes.

[Castrol for a knave]

AB said:

They're difficult tenants by all accounts, hence the current owner wanting to get shut. I don't think they've done anything with clear grounds to serve notice but late payment of rent regularly albeit it it does turn up.

Maybe it's a non-starter. Maybe I need to go into business with the current owner which would then give him the grounds of his own business use?

JQ is exactly right. The vendor won't be able to use Ground G unless he's got a definite plan for his own occupation ("a firm and settled intention...." - Denning).

The best bet is as has been suggested, agreeing a sum for them to vacate. Other than that, walk away if you want to occupy yourself.

[AB]

Sounds like it may be more hassle than it's worth then. Back to the drawing board.

Thank you all.