Can I Pull Out Of Commercial Lease Before Completion

[Annon]

Hi, we signed a commercial lease about a 2 months ago, not dated, and wish to pull out. We returned the lease to the landlord's solicitor with no covering letter.

We have since chased for a date as to when we can move into the workshop, usually getting no reply from either the landlord or their solicitor. About a month ago we were told that the landlord had signed, and we 'may' be able to 'complete' the following day. We said this sounded great but looked for clarification as to what exactly 'complete' meant. Basically we thought this might mean we would agree dates and when/where we could collect keys.

We didn't hear anything more for 2 weeks so we chased the landlord and he said he was waiting for his solicitor to come back from holiday. Now it has been a further 2 weeks with no word from either their solicitor or the landlord.

We were actually hoping to have moved in about 5 months ago, but this has dragged on so long that we have been having second thoughts, and so have been keeping an eye out for another workshop as this one seemed like it was never going to happen.

We have now found another workshop and want to cut our losses with this one (about £1k in solicitor and surveyor fees, and a long time in business limbo) and go for this new one.

We have read somewhere how we should have sent the lease under the condition that we agree the date of the lease before it is complete. We have therefore sent an email to the landlord and his solicitor saying we are waiting to agree a date for the lease and for the start of our term, asking if they could confirm this for our clarification. Hopefully this will result in them confirming this situation and therefore we can just not agree a date and the lease will not stand. Am I understanding this right?

Is there anything else we can do to get out of this given how slow it has been or anything else? No deposit has been paid or anything like that.

Any help you gurus can shine my way would be much appreciated! Thank you very much in advance, and in retrospect since your contributions to this site have already helped me out many a time.

 

[kulture]

I assume from this post you did not use a solicitor. If you did, go see them now. If you did not, it is vital that you go see one immediately. Commercial leases have little or no safety nets and entirely depend on the wording. No-one here can help properly without seeing the lease.

 

[Annon]

Yes we saw a solicitor and have contacted him for his advice tonight. The reason for this post is that I like to do my own digging too.

This isn't so much to do with the wording of the lease, so much as to do with: at what point the lease becomes solid if you know what I mean. As far as I am aware this has something to do with whether they have dated it yet.

 

[Annon]

If anyone else has any advice, my partner and I would much appreciate it. I understand seeking advice from a solicitor is the solution, but that would probably be the solution to most posts on a business forum in the 'Legal' section. So I think, although valid, that answer kinda misses the point of this forum.

I'm hoping someone has some experience of similar situations from either perspective.

There's always a chance that the landlord would be happy for us to pull out covering his costs, he's been very reasonable throughout, just very slow. But we want to cover ourselves legally so that we are not just laying down to his mercy. It would even work out better for us if we wrote him a check for £1k to let us go if it came to it, so we are not unreasonable either, but legally there surely must be something out there on our side? As it stands, we could be waiting indefinitely for a move in date and years from now we might get a call saying the lease has been dated and we are now tied in.

 

[Supercoach]

If you insist on not taking legal advice with all the relevant documentation you should
e-mail both landlord and solicitor instructing that the proposed commencement date must be mutually agreed and cannot in any event be before XYZ (say 30 days in the future). This needs to be a firm instruction and not capable of being misunderstood or misinterpreted. This will stand you in good stead should things not go your way in the future.
If there is anything other than agreement to this you really must see a solicitor.

 

[Annon]

Thank you very much for this. This confirms what I was thinking, but I hadn't thought of giving a made up date too. Do you have any suggested wording? Obviously I don't want to sound too legal and arouse suspicion that we might want to pull out (because then they may be able to get away with back-dating the lease and tying us in), but like you say, we need to be very clear too. I also don't want there to be confusion between the lease date and the term start date, because they could always back-date the lease. I want to be clear that I am talking about the lease date as it is that date being entered that will tie us in.

Also just to be clear, we are talking to our commercial solicitor and have done so throughout. But I am also seeking advice here so that I am not blindly relying on one solicitor that we have never used before.

 

[KM-Tiger]

Also just to be clear, we are talking to our commercial solicitor and have done so throughout. But I am also seeking advice here so that I am not blindly relying on one solicitor that we have never used before.

And that is extremely sensible.

The better informed you are, the more you will get out of discussions with the solicitor.

 

[Supercoach]

I would not fear too much about a lease being back-dated in the way you are suggesting.
You should say.
'Please be advised that the proposed lease (address) must not be entered into without a mutually agreeable commencement date and in any event not before (date).
Please confirm this arrangement and I look forward to hearing from you as soon as possible.'

Let's be clear. You are instructing them that you are not / have not entered into the lease as of the date of writing.
They will either:
come back and say 'what date do you want?' Tacit agreement that the lease is not live.
not respond. You have a get out.
respond with a 'it's too late' reply in which case let your solicitor handle it.

 

[Annon]

You are a star. Thank you very much for that. We have some correspondence that may or may not work in our favour but I will go through that with our solicitor. Your help has made me feel much more comfortable with where we stand and how to hopefully protect ourselves further using tactfully worded emails!

Thanks again

 

[Annon]

Just to follow up... Our solicitor doesn't seem at all worried about us getting out of the lease at this stage, because he says it isn't completed until they take the first payment and a date is agreed. I think I've read something contradictory to this saying that they don't have to wait for you to agree a date and can date it themselves unless you made it clear that you do not enter into the agreement until you have mutually agreed the dates. But he does say it would be very sneaky and poor of them to attempt to force us into anything at this point. Of course we have to protect ourselves nonetheless, so after suggesting this tactical email to follow up a weakly worded one I had already sent, he seemed quite impressed at the idea. Possibly a bit worrying that he didn't suggest it himself without my prompting? But hey, who can compete with the hive mind?

Thanks again again

 

[Supercoach]

I don't believe you have a problem but always better to give yourself a little extra protection.
Good luck