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Leases

Discussion in 'General Discussion' started by Cryogenic, 10 Jun 2010.

  1. Cryogenic

    Hitman

    Joined: 10 Jul 2007

    Posts: 932

    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.
     
  2. Ahleckz

    Capodecina

    Joined: 7 Nov 2009

    Posts: 18,287

    Location: Glasgow

    Is there nothing in the contract that says what is applicable if the tenant changes?
     
  3. Cryogenic

    Hitman

    Joined: 10 Jul 2007

    Posts: 932

    Not that I can see, it just says the lease terminates if they don't pay the rent for 28 days, that is why I am confused :confused:
     
  4. K.C. Leblanc

    Sgarrista

    Joined: 13 Sep 2003

    Posts: 8,161

    Location: Glocestershire

    Is the lease in the name of a person or a limited company?
     
  5. Cryogenic

    Hitman

    Joined: 10 Jul 2007

    Posts: 932

    Both, it is listed as

    Name of owner T/A Shoe Shop :)
     
  6. Pipe & Slippers

    Wise Guy

    Joined: 4 Jan 2004

    Posts: 1,116

    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?
     
  7. TheBigCheese

    Mobster

    Joined: 6 Sep 2005

    Posts: 3,799

    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!
     
  8. Cryogenic

    Hitman

    Joined: 10 Jul 2007

    Posts: 932

    Thanks for the suggestions chaps, will raise the points you guys raised with a legal beagle to see what he has to say on the matter :)