Commercial Let - Giving Notice
Discussion
Have been negotiating with my current landlord of 20 years for the past 9 months re: extending lease. Trouble is he would only give a 5 year renewal, plus hefty increase and wanted the tenancy signed outside the act. Obviously not an ideal situation but my business is very location sensitive and he had me by the balls.
Any way the premises next door comes up, I check with my solicitor who says you haven't signed anything so you're free to go. I ask my current Landlord what his take on it all is but don't get any reply. After a month I put in writing that I would be leaving in 3 months and did not wish to continue with renewing the contract and gave notice of my intention to vacate on June 1st. After a couple of week he comes back to me saying maybe he was being unfair with the terms of the new lease and would I like to stay. By now I've signed a temporary license to give me access to the new building so decline his offer. I asked again if he thought I was free to go and he agreed with my solicitor, i.e. you've not signed anything.
No problem then, only this morning I received an email dated 1st June (the date my notice expired) which read - the notice you gave me wasn't valid.
Anyone have any experience in these things and mind offering some advice on where they think I stand.
Thanks
David
Any way the premises next door comes up, I check with my solicitor who says you haven't signed anything so you're free to go. I ask my current Landlord what his take on it all is but don't get any reply. After a month I put in writing that I would be leaving in 3 months and did not wish to continue with renewing the contract and gave notice of my intention to vacate on June 1st. After a couple of week he comes back to me saying maybe he was being unfair with the terms of the new lease and would I like to stay. By now I've signed a temporary license to give me access to the new building so decline his offer. I asked again if he thought I was free to go and he agreed with my solicitor, i.e. you've not signed anything.
No problem then, only this morning I received an email dated 1st June (the date my notice expired) which read - the notice you gave me wasn't valid.
Anyone have any experience in these things and mind offering some advice on where they think I stand.
Thanks
David
Need more information to comment.
I assume from your comment that your lease for the original property is protected by the Landlord and Tenant Act 1954? If so when did/does it expire?
Has the Landlord served a S25 Notice stating that he is terminating the lease and is prepared to grant a new lease on the the following therms etc?
If the Landlord has served a Section 25 Notice what date did that expire?
I assume from your comment that your lease for the original property is protected by the Landlord and Tenant Act 1954? If so when did/does it expire?
Has the Landlord served a S25 Notice stating that he is terminating the lease and is prepared to grant a new lease on the the following therms etc?
If the Landlord has served a Section 25 Notice what date did that expire?
Hello Chris,
Thanks for your response.
Yes original lease protected by Landlord Tenant Act - expired June 2006 - 10 year term.
No notices have been served by the Landlord - Landlord began verbal negotiations re: original lease in September 06 - finally disclosed his intenions verbally regarding increase, shorter term and outside act in December 06. Since then it's been batted around between both parties solicitors.
Look forward to your reply.
David
Thanks for your response.
Yes original lease protected by Landlord Tenant Act - expired June 2006 - 10 year term.
No notices have been served by the Landlord - Landlord began verbal negotiations re: original lease in September 06 - finally disclosed his intenions verbally regarding increase, shorter term and outside act in December 06. Since then it's been batted around between both parties solicitors.
Look forward to your reply.
David
Edited by davidn on Sunday 3rd June 21:24
In that case you should give your Landlord a notice under Section 27(2) of the Landlord and Tenant Act 1954. The notice can expire on any day, but the expiry day has to be 3 months after the Notice was served. There is no prescribed form of notice.
Now I can't remember how much notice you said you had given but hopefully this helps. Assuming you gave 3 months Notice it is going to be a legal opinion as to whether it complies with the terms of the Act or not!
Edited to add: -
Now read your post and see you gave 3 months Notice so you should be fine. Incidentially what if anything have you done abour dilapidations? They could come back to bite you!
Now I can't remember how much notice you said you had given but hopefully this helps. Assuming you gave 3 months Notice it is going to be a legal opinion as to whether it complies with the terms of the Act or not!
Edited to add: -
Now read your post and see you gave 3 months Notice so you should be fine. Incidentially what if anything have you done abour dilapidations? They could come back to bite you!
Edited by Chrisgr31 on Sunday 3rd June 22:15
Thanks again Chris,
My Landlord mentioned that he would compile his own list of dilaps and let me have a copy to get on with. In his email he is now arranging for a surveyor to prepare this (I assume at my expense).
I have already painted and repaired the external and internal of the building just hoping not to have to replace carpets. I'd be the first to agree they're not in great condition but I have laid 4 carpets at the last count and it wasn't exactly a palace when I took it over. Do I need to return it to a rentable condition, a perfect or an as was condition? I'm not sure.
He hasn't had any takers for the building yet and has only started marketing in the last 2 weeks when he could have had it on the market 3 months ago, joke is I've phoned the agent and they can't tell me much about it as the chap who prepares the particular is on his hols. I suspect the lack of interest (it is expensive for what it is) is making him twitchy although I have passed a few contacts on to the Landlord who had expressed a direct interest.
Again thanks for your advice it's much appreciated.
David
My Landlord mentioned that he would compile his own list of dilaps and let me have a copy to get on with. In his email he is now arranging for a surveyor to prepare this (I assume at my expense).
I have already painted and repaired the external and internal of the building just hoping not to have to replace carpets. I'd be the first to agree they're not in great condition but I have laid 4 carpets at the last count and it wasn't exactly a palace when I took it over. Do I need to return it to a rentable condition, a perfect or an as was condition? I'm not sure.
He hasn't had any takers for the building yet and has only started marketing in the last 2 weeks when he could have had it on the market 3 months ago, joke is I've phoned the agent and they can't tell me much about it as the chap who prepares the particular is on his hols. I suspect the lack of interest (it is expensive for what it is) is making him twitchy although I have passed a few contacts on to the Landlord who had expressed a direct interest.
Again thanks for your advice it's much appreciated.
David
Dilaps is not an area I specialise in, however your lease will determine what state the property has to be returned to the Landlord. The Landlords surveyor, who indeed you have to pay for (in most cases) will be seeking to do the best deal for his client, the landlord. He almost certainly will be suggesting new carpets, and probably the worlds most expensive ones at that!
If you have redecorated this should help reduce the bill. Depending on the size of the claim, the location of the property I may be able to recommend someone to act on your behalf to help reduce the bill. Although I have a horrible feeling that as you have now vacated your opportunities are limited.
If you have redecorated this should help reduce the bill. Depending on the size of the claim, the location of the property I may be able to recommend someone to act on your behalf to help reduce the bill. Although I have a horrible feeling that as you have now vacated your opportunities are limited.
So are you still in the premises or now in new premises?
The S25 notice should be served 6 months prior to the end of the original lease duration but not more than 12 months prior. If the tenant is paying a higher than market rent then the landlord may chose not to issue the notice on the basis that it puts the ball in your court to serve an S26 notice (I thought it was a S26 rather than an S27 that was needed in this case Chris? Could well be wrong!!). Once 'holding over' (ie past the end of the original lease) you are entitled to break at any time subject to written notification of 3 months intention to break - I under stand that written notice can now include email but your solicitor would be able to clarify this - I would always suggest breaks are sent by both email and hard copy. If you renewed then I am under the belief that your new lease would automatically continue within the 'act' by default of the fact your original lease was inside the act.
You are entitled to appeal any dilaps charges and you can appoint a building surveyor to act on your behalf in this manner.
The S25 notice should be served 6 months prior to the end of the original lease duration but not more than 12 months prior. If the tenant is paying a higher than market rent then the landlord may chose not to issue the notice on the basis that it puts the ball in your court to serve an S26 notice (I thought it was a S26 rather than an S27 that was needed in this case Chris? Could well be wrong!!). Once 'holding over' (ie past the end of the original lease) you are entitled to break at any time subject to written notification of 3 months intention to break - I under stand that written notice can now include email but your solicitor would be able to clarify this - I would always suggest breaks are sent by both email and hard copy. If you renewed then I am under the belief that your new lease would automatically continue within the 'act' by default of the fact your original lease was inside the act.
You are entitled to appeal any dilaps charges and you can appoint a building surveyor to act on your behalf in this manner.
Edited by TimCrighton on Thursday 12th July 14:33
TimCrighton said:
So are you still in the premises or now in new premises?
The S25 notice should be served 6 months prior to the end of the original lease duration but not more than 12 months prior. If the tenant is paying a higher than market rent then the landlord may chose not to issue the notice on the basis that it puts the ball in your court to serve an S26 notice (I thought it was a S26 rather than an S27 that was needed in this case Chris? Could well be wrong!!). Once 'holding over' (ie past the end of the original lease) you are entitled to break at any time subject to written notification of 3 months intention to break - I under stand that written notice can now include email but your solicitor would be able to clarify this - I would always suggest breaks are sent by both email and hard copy. If you renewed then I am under the belief that your new lease would automatically continue within the 'act' by default of the fact your original lease was inside the act.
You are entitled to appeal any dilaps charges and you can appoint a building surveyor to act on your behalf in this manner.
As a tenant you would only serve a S26 Notice if you wanted a new lease. If you didn't you either vacate by the last day of the term, or if already holding over serve a S27 Notice.The S25 notice should be served 6 months prior to the end of the original lease duration but not more than 12 months prior. If the tenant is paying a higher than market rent then the landlord may chose not to issue the notice on the basis that it puts the ball in your court to serve an S26 notice (I thought it was a S26 rather than an S27 that was needed in this case Chris? Could well be wrong!!). Once 'holding over' (ie past the end of the original lease) you are entitled to break at any time subject to written notification of 3 months intention to break - I under stand that written notice can now include email but your solicitor would be able to clarify this - I would always suggest breaks are sent by both email and hard copy. If you renewed then I am under the belief that your new lease would automatically continue within the 'act' by default of the fact your original lease was inside the act.
You are entitled to appeal any dilaps charges and you can appoint a building surveyor to act on your behalf in this manner.
Edited by TimCrighton on Thursday 12th July 14:33
You can appeal Dilaps, but if you are no longer entitled to access the building it can be a problem getting in so as to know what the diplaps were!
If you renew your lease then the terms are subject to negotiation between the parties. They can negotiate to take the lease outside the Act but the tenant would be remarkably stupid to agree to it! The Court would be likely to determine the new lease should be in the Act.
Nothing on this thread should replace the need to appoint a Chartered Surveyor to act who will read the relevant leases and provide the information in any specific case!
Chrisgr31 said:
[You can appeal Dilaps, but if you are no longer entitled to access the building it can be a problem getting in so as to know what the diplaps were!
One of my businesses recently vacated a warehouse. We arranged with the Landlord for a Schedule of Delaps to be done almost 2 months before we vacated (so we could do the work). The SoD (good accronym!) report wasnt delivered to us until a month after we handed the keys back. Sneaky bar steward!Not only that but we feel the Landord is being extremely vindictive (although technically in the right). He's demanding the mezzanine floor, put in by the previous tenant, and all new lighting/sockets/alarm/security cameras/small office area etc removed, and property left completely bare 'cept for 1 single electric socket. This is despite the fact that the mez floor and sockets/office etc 'should' enhance the relet, and the fact I have pointed an intersted party, who is only interested IF the mez floor is in, in the direction of the Landlord!
The Landlord has agreed to let my surveyor in to compare delaps, so fingers crossed.
The Landlord's SoD comes to £17k although being in property, I can get my guys to do all the work insisted for about £7k. He better not take the money and not do the works or I'll have his guts for garters!
Normally the boots on the other foot as I am a landlord by trade. Its now got me thinking that Im not 'hard enough' on my tenants
If its an improvement, then why make me/them take it out?
Whether one should be harsh on your tenants or not potentially depends upon the size of your company, and location.
I have a number of leasehold clients who will refuse to have anything to do with properties owned by one national company, because they feel that they are too harsh and unfair as Landlords.
So if you can afford to piss off potential tenants go ahead and do so!
The issue with mezzanine floors is much more complex, and is something I deal with regularly wearing my "business rates" hat. The installation of a mezzanine floor is remarkably cheap, compared to the expected cost, and indeed compared to the rental value applied by some. However a mezzanine floor can restrict the use of the property, and in particular the use of a forklift truck within it. It is certainly my experience that most Landlords seek their removal.
The other thing is that if the unit is stripped out in then gives the Landlord a "genuinue" (spelling!) reason for offering a rent free period for "fitout", whereas in reality rent frees are offered to sweeten the deal and limit the total rent over the years to the the first review!
I have a number of leasehold clients who will refuse to have anything to do with properties owned by one national company, because they feel that they are too harsh and unfair as Landlords.
So if you can afford to piss off potential tenants go ahead and do so!
The issue with mezzanine floors is much more complex, and is something I deal with regularly wearing my "business rates" hat. The installation of a mezzanine floor is remarkably cheap, compared to the expected cost, and indeed compared to the rental value applied by some. However a mezzanine floor can restrict the use of the property, and in particular the use of a forklift truck within it. It is certainly my experience that most Landlords seek their removal.
The other thing is that if the unit is stripped out in then gives the Landlord a "genuinue" (spelling!) reason for offering a rent free period for "fitout", whereas in reality rent frees are offered to sweeten the deal and limit the total rent over the years to the the first review!
paoloh said:
I'm abot to sign a lease on some new premises and landlord stated it was out landlord act.
What exactly does that mean?
What implications are there for me?
Most noteable point being that if its outside the act you wont have the automatic right to renew the lease at the end of the term. If you've paid a premium to go in to the property, they may ask you for another premium if you want to renew.What exactly does that mean?
What implications are there for me?
Edited by paoloh on Friday 13th July 20:30
FUBAR said:
paoloh said:
I'm abot to sign a lease on some new premises and landlord stated it was out landlord act.
What exactly does that mean?
What implications are there for me?
Most noteable point being that if its outside the act you wont have the automatic right to renew the lease at the end of the term. If you've paid a premium to go in to the property, they may ask you for another premium if you want to renew.What exactly does that mean?
What implications are there for me?
Edited by paoloh on Friday 13th July 20:30
As Fubar says you have no right to renewal and can be evicted. Personally I believe that being outside the Act should be reflected in a discounted rent. Fubar being a Landlord would probably disagree! I would look at somewhere between 15% and 25% below the rents for those who are protected by the Act.
Hmmm I really ought to proof read my posts better, or get a new keyboard! I am sure I pressed all the right buttons!
Anyway a "bloody cheap" rent is comparative, so as long as it is bloody cheap compared to somilar buildings in the same area thats great. Although I'd be inclined to wonder why it hasn't been snapped up if its bloody cheap!
Just remember that if outside the Act and you have say a 3 year term, that £5,000 in improvements could be wasted as you could get no renewal.
Incidentially I was amused to read in the Telegraph today the CE of a large property company saying that a company would never keep units empty to achieve higher rents. Well I have been to two estates owned by that company in the last 3 weeks where there are lots of voids purely due to the rents!
Anyway a "bloody cheap" rent is comparative, so as long as it is bloody cheap compared to somilar buildings in the same area thats great. Although I'd be inclined to wonder why it hasn't been snapped up if its bloody cheap!
Just remember that if outside the Act and you have say a 3 year term, that £5,000 in improvements could be wasted as you could get no renewal.
Incidentially I was amused to read in the Telegraph today the CE of a large property company saying that a company would never keep units empty to achieve higher rents. Well I have been to two estates owned by that company in the last 3 weeks where there are lots of voids purely due to the rents!
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