Leases

Associate
Joined
10 Jul 2007
Posts
933
Hi legal peeps,

Quick question, I gave my shop to a shoe trader for 300 pounds per month and my solicitor created a lease for 10 years with them, the shoe trader has been there 2 years and wants to sell his shoe business for 20K. Does the new owner have to pay me the remainder 8 years of the lease before I transfer it or can the shoe trader simply sell his business as long as the new buyer keeps paying the rent? :) Thanks.
 
Associate
Joined
4 Jan 2004
Posts
1,322
Location
Finally, Swindon
Usually if someone signs a lease for X years, they have a liability to pay for X years. If they sell up/move out, it's not your problem, they still have the liability.

In practice what often happens is that the lease is novated(?) with your agreement to the new tenant and they pay you instead of the original leaseholder.

The main point though is that the original leaseholder still retains the liability. So if the new tenant goes bust, you have recourse to the original leaseholder for the remainder of the term. If that sounds a bit tough, you've entered into a contract with the shoe man on the basis of who he is and your assessment of his creditworthiness over 10 years, he shouldn't be able to get out of it by letting any Tom, Dick or Harry take over the lease when they might go bust the next week.

I've now forgotton the exact circumstances but quite a few years ago, a major retailer sold off a load of it's high street stores and there was quite a flap because the new owner was looking likely to go bust, transferring all the outstanding lease liabilities back to the original leaseholder

Not sure how it applies in this case though with the lease seemingly ceasing if they don't pay - what's the point in having a 10 year lease if they can break it at 28 days notice?
 
Soldato
Joined
6 Sep 2005
Posts
3,781
As far as I am aware the shoe shop guy would have to keep paying you until you can find a new tennant who can take over the rent.

It could be the case that he has to keep paying, but technically you could be claiming rent up to three or four times if the lease changes hands.

I would have thought it would say in the lease that he will have to keep paying until a new tennant can take it over.

That's speculation though...if you are unsure talk to your solicitor!
 
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