18 months left on lease - who should approach landlord ?

[Talay]

Bricks and mortar again !

Current tenant went through a rent review a couple of years ago but no increase was mandated. It is my understanding that the landlord has the ability to backdate any uplift in the rent to the time of the review date.

But now they want out and potentially I want the building but with a new lease.

So should they or their agent or solicitor approach the landlord (a professional company not an individual) or should my agent or solicitor make the approach on behalf of my company ?

Of course my legal team will do anything and bill accordingly but no point in burning cash if the current tenant is better placed to make the initial approach.

 

[MOIC]

If no rent increase was mandated during the last rent review why do you say that the landlord can backdate any uplift, if there wasn't one?

The current tenant would first have to agree and end to their lease agreement with the landlord to see if they are acceptable and at what terms. They can indicate to the landlord that a new tenant is interested in the premises.

Assuming that the current tenant and landlord can agree to end the lease on mutual agreeable terms, the landlord will then offer you a new lease on completely new terms to be negotiated and agreed.

There is no guarantee that the landlord will offer you a new lease even if he has agreed a termination of the lease with the current tenant.

If you have spoken with the current tenant and agreed that you will take over the lease, then your solicitors should work in tandem with the tenant's solicitors and ensure a new lease is offered at the same time as the current lease has been terminated.

The terms of the new lease would have to be negotiated and agreed first with the landlord.

 

[Talay]

Can assign within L&T Act.

 

[MOIC]

Best for all concerned for the current lease to be terminated while at the same time the landlord granting you a new lease, which has been negotiated and agreed.

All 3 sets of solicitors would need to be engaged during this process.

 

[Talay]

Best for all concerned for the current lease to be terminated while at the same time the landlord granting you a new lease, which has been negotiated and agreed.

All 3 sets of solicitors would need to be engaged during this process.

Not necessarily best at all, only one option. e.g. current tenant could agree new lease and assign, or simply assign now etc.

Obviously current tenant in agreement or this couldn't happen.

Just a matter of who should approach landlord, no need to burn 3 sets of lawyers from the get go.

 

[MOIC]

A new lease being granted to the new tenant will be the best solution for each of the 3 parties.

Existing lessee, by assigning the lease will not be absolved of their legal responsibilities to the lease.

New tenant, would have a new lease, negotiated to their terms and not carry forward any possible repairs or schedule of dilapidation, if this currently exists in the lease.

Landlord will have a new tenant and lease which their solicitors would ensure that the covenant is at least as good as the previous tenant.

For there to be an agreement with all 3 parties, all solicitors would need to be engaged in order to agree the terms and dates.

The above are general points and as every lease is different cannot reasonably be specific to a particular lease or situation.

 

[brixsus]

Landlord will probably want to assign as opposed to terminate and renew. He will no doubt want existing tenant to enter into an authorised guarantee agreement to guarantee the old lease if your company does not pay the rent. Double protection for the landlord.

If the lease allows for assignment, usually it will state that this request can not unreasonably be withheld by the landlord.

In answer to your question, the existing Tenant should approach the Landlord.

Also, as My Office In China says, if there is no increase, there is nothing for the Landlord to backdate.

Make sure you get a solicitor on board as soon as the existing Tenant and Landlord have agreed to the transfer.

 

[MOIC]

It really depends on the amount left on the existing lease, if it is under 2 years, the landlord will probably prefer a termination of the lease (existing tenant to fulfil all the obligations of the current lease) and granting a new lease.

This is best for all 3 parties.