Commercial property lease

[BubbaWY]

Just after some views on the following.

My partner signed up to a commercial lease on a light industrial unit - the landlord is the local council. In the Heads of Terms, under 'electrical testing' it states:

The landlord is to supply an electrical safety certificate forthe property and upon lease expiry the tenant is required to provide an up to date certificate.

She has had a couple of electrical companies round with a view to doing some work, but they have refused to work on the installation as a) the distribution board is now obselete and b) there are significant faults which need resolving. With the above (from the HoT) in mind, my partner contacted the landlords agent who arranged for an electrician to come round to replace the distribution board. When he turned up, he said he had only been instructed to do an EICR (Electrical Installation Condition Report), which has obviously flagged up the issues the other electricians had picked up on. So an electrician is going to attend again, to replace the board and put right the major issues. This will have delayed things for a month.

My partner negotiated a 2 month free rent period but with these delays, she wont have had the full benefit of this rent free period. Legally, do you think she would have a case for an additional month? I know you are going to suggest she speaks to a solicitor, but her budget (for preparing the unit for opening) is almost gone.

 

[WaveJumper]

Not going to suggest going to a solicitor be will ask why her surveyor never picked up on any issues before lease was signed

 

[BubbaWY]

What surveyor?

Putting aside what should/shouldnt have been done prior to signing the lease, the Landlord hasnt fulfilled their obligation (regarding the electrics).

 

[Paul Kelly ICHYB]

the Landlord hasnt fulfilled their obligation (regarding the electrics).

The landlord is to supply an electrical safety certificate

Did they provide one?

 

[BubbaWY]

No, they sent an electrician out to replace the distribution board and then do the condition report. However, he turned up just to do a condition report...which highlighted major issues. So the landlord is now paying for the distribution board to be upgraded. Which is all good...but it has delayed my partner so she isnt having the full benefit of the 2 month free rent period.

 

[Paul Kelly ICHYB]

but it has delayed my partner so she isnt having the full benefit of the 2 month free rent period

So they go back to the council and negotiate....?

 

[fisicx]

Go back to the landlord and ask for an extension. If they say no you will need to get the lawyers involved.

 

[BubbaWY]

They have said no. Thats why, as per my opening post, I am asking people for their opinions on where she may stand, legally.

 

[Paul Kelly ICHYB]

They have said no.

Escalate the issue.

The devil will be in the detail about the rent free period. The fact they supplied a certificate that proved false i.e. fraudulent is a good place to start.

Re legal advice, whilst it is the best route, you need to balance the cost against the saving.

 

[BubbaWY]

The council never provided a certificate.

 

[fisicx]

The council never provided a certificate.

So why was the lease signed if there wasn't a certificate?

 

[BubbaWY]

Because the HoT said 'The landlord is to supply an electrical safety certificate for the property' which I assume my partner thought would follow. But regardless...thats not the issue here as, stated above, the Council are sorting the electrics.

 

[Mark T Jones]

To condense the above, you may well; have a case, but your don't have any automatic rights.

As always, next step is to create a precise timeline of events (stay clear of opinions & distractions) and a quantified statement of costs/losses incurred.

My suggestion would be to submit it as a bill, whilst suggesting that you may consider an offset in rent. (makes it easier for small claims)

 

[eteb3]

Is there any electricity at all or is the unit unusable?

How long was it before she challenged the non-provision of the certificate?

 

[BubbaWY]

There is electric, but the works she was wanting to have done have had to be delayed because no electrician will work on it until the issues have been sorted out. Id say maybe a month passed before requesting the electrical cert.

 

[WaveJumper]

I am sorry but this is a classic case of not seeking proper advice before agreeing / signing a lease, did they also obtain an Asbestos survey report, did they make a de-laps record for proof of conditiion

They now find themselves in the position after the event of seeking legal representation especially if the council will not yield to an extension request, are you corresponding through the agent or going directly to landlord as personally I would not trust their agents to be passing on all info.

 

[BubbaWY]

I did tell her, but she simply didnt have anymore money set aside for legal advice. The condition of the unit isnt too much of a concern as it probably needed knocking down. She is doing significant improvements to it but we did do a de-lap record. Took hundreds of photos.

We are dealing through an agent, who is an absolute ****. My partner can be quite blunt, but he is pretty unprofessional at times. Im still waiting a response from him regarding the extension of the rent-free period and request for the asbestos report. Regardless of whether my partner shouldnt have signed the lease before getting the elec cert and asbestor report, do they have a legal duty to provide these to a tenant, prior to them signing? Or is the fault fully on my partner?

 

[eteb3]

Butt (2008) Commercial Property:

In general, a breach by the landlord of one of his covenants will entitle the tenant to bring a claim for damages. The measure of damages will usually be the difference betwen the value of the tenant's interest in the premises with the covenant performed and the value with the covenant broken. In certain circs, the tenant may seek a more appropriate remedey, eg specific performance or injunction.

The challenge will be assessing the measure (amount). Afaik the relevant value is the value of the unit as such, not the value to the particular tenant's particular business. A solicitor could confirm.

There is electric, but the works she was wanting to have done have had to be delayed because no electrician will work on it until the issues have been sorted out.

That sounds like consequential loss. Generally I think consequential loss is not relevant in damages - again a solicitor can confirm, or maybe others on here. But possibly as a business lease, the loss may considered as direct, not consequential. Solicitor.

Id say maybe a month passed before requesting the electrical cert.

The tenant didn't immediately show that the lack of a certificate was an issue for her. Could this be said to contribute to the costly delay for which she's claiming? Or as a covenant with no requirement of notice by T, is LL liable from day 1? Solicitor...

The other sticky bit is that the covenant is worded as "providing a certificate", not "putting the premises in certificatable condition". That might fairly be implied (and LL seems to have accepted that), but compare a claim for damages for not having a certificate ("I would only have paid £X for the unit without that covenant") with a claim for substandard electrics ("The poor wiring has cost me £XXXX - even though the electrics are usable"). She'd rather make the second claim, but might only be able to make the first.

 

[eteb3]

do they have a legal duty to provide these to a tenant, prior to them signing?

Absolutely not. Commercial leases are about the most onerous contracts known to English law. You’re at daggers drawn with an adversary who owes you nothing that’s not written in the lease (or necessarily implied there).

request for the asbestos report

If this says “riddled with asbestos, don’t touch a thing”, then on the limited info here LL will have performed their covenant by providing the report.
But you’d think these reports would be due dil prior to signing the lease, not covenants in it. You’re sure they’re lease covenants?

she simply didnt have anymore money set aside for legal advice

I won’t preach, but for posterity: this is why if you can’t afford the legal advice, you can’t afford to take the lease

 

[BubbaWY]

Regarding asbestos, the HoT says:

"The Landlord to provide copies of statutory compliance records, including record of servicing and testing of equipment and plant, asbestos data, plans and legionella tests".

 

[eteb3]

Ok so that’s the HoT; those don’t normally form part of the lease. Rather the lease should formalise them but is a separate agreement.

If the implication is these are for due dil, I would think taking possession without them is acceptance of LL’s breach of a simple contract.

 

[fisicx]

Which all points to needing a solicitor to argue your case.

 

[BubbaWY]

We arent wanting a legal battle. We just wanted to know if we had a strong argument for expecting the electrical delay adding to the rent-free period.