Lanlords Tort

[Gary&Tracy]

Hi Hive

Firstly, we apologise if this is a long question and that we might not be using the correct terms, but we have found this site a mine of useful information and help in the past.

We put our business into voluntary liquidation last year (Sept) which is still in the process of being completed. The business was a country bar / restaurant & B&B.

We instructed a company to liquidate the company for us and we were advised to leave the premises, and also leave all the fixtures and fittings (F&F). In our understanding these would be sold by the liquidators and the proceeds used to pay off the creditors. Due to the value and expense of removing the F&F they decided not to do this.

Now, the landlord has going through the process of taking us to Court for the outstanding rent as he believes that we were personally liable, but as yet he has not produced any documentation to show this. We are due in Court on the 1st July for a dispute resolution hearing, and we have to put forward copies of any documentation that we intend to reply on.

Now this is the real crux of the question and it’s about “Landlord Tort”

We vacated the premises on the 8th July 2024, and following this the landlord informed us that he would be entering the premises during the week commencing 22nd July 2024, and would begin marketing the premises to find a new tenant. On the 23rd August 2024 we received a notice form the landlord giving us 14 days to remove any property that we had left. As the insolvency process was still in motion, we did not believe that these items were ours to remove as they were the property of the insolvency practitioner.

We have since found out that the landlord has kept most of the F&F’s and used them to lease the premises to a new tenant, and not disposed of them as he said he would. If we had removed all our F&F’s then the landlord would have had no chance of leasing an empty premises to run as before.

Having researched the internet, I have found something about involuntary bailee which says that an involuntary bailee cannot gain financially from disposing of the goods, which he has by using them as F&F to lease the premises. We are not sure if this applies in this case, but we would be interested to hear other people’s views on this.

Hopefully, there is someone out there who has previous knowledge of this type of situation, and could possibly offer us some advice?

 

[Paul Kelly ICHYB]

What did your solicitor say about this?

The key issue, as is always the case, is what does your contract say and who is it with?

Was there a PG?

What happened to the deposit?

 

[Gary&Tracy]

What did your solicitor say about this?

The key issue, as is always the case, is what does your contract say and who is it with?

Was there a PG?

What happened to the deposit?

Hi Paul
We have not got to the solicitor stage as yet as our current financial situation won't cover any expense.
We have a copy of the contract that was provided to us by our then solicitor, but it is unsigned, and neither of us remember signing a personal guarantee which we would have as I did have to sign a personal guarantee for my part of the finance for the business originally, which was done at a different solicitors office to our so not to cause a conflict of interests.
There was no deposit.
Gary

 

[Paul Kelly ICHYB]

We have not got to the solicitor stage as yet as our current financial situation won't cover any expense.

How much more will it cost if you do not get advice?

Many courts offer a pro bono/free legal advice service via volunteers or if you are a member of some business communities, you may get access to legal advice.

 

[Gary&Tracy]

How much more will it cost if you do not get advice?

Many courts offer a pro bono/free legal advice service via volunteers or if you are a member of some business communities, you may get access to legal advice.

Currently looking at Pro Bono legal advice as a starting point, but thanks for the suggestion.

 

[John Martin]

Currently looking at Pro Bono legal advice as a starting point, but thanks for the suggestion.

There's also citizen's advice, or you could subscribe to Which legal service (as in Which consumer magazine). Which legal is about £100 for a year's subscription and you can contact them as many times as you need and on any number of cases. It's good as a starting point.

 

[Lisa Thomas]

If there is no PG, then it sounds like the landlord's claim is against the company in liquidation, so has no bearing on your personally.

 

[Gary&Tracy]

If there is no PG, then it sounds like the landlord's claim is against the company in liquidation, so has no bearing on your personally.

That's what I am thinking. The copy we received when we bought the business is blank, and I am sure that our solicitor when she was doing her due diligence would have put a signed copy in the completion file.

 

[MikeJ]

Was it a limited company?

 

[eteb3]

Sounds like LL has used the statutory replacement for common law distress: a tenant’s chattels in a leased property could formerly be distrained (taken possession of) if there were arrears of rent, and now there’s a statutory procedure.

See https://www.kingsleynapley.co.uk/in...e-law-of-distress-more-red-tape-for-landlords
(Not read exhaustively)

If I’m right, you want Chapter 2 of Part 3 of the Courts, Tribunals & Enforcement Act 2007

 

[Michael Loveridge]

We are due in Court on the 1st July for a dispute resolution hearing, and we have to put forward copies of any documentation that we intend to reply on.

You need to read the original Claim Form that you would have received at the start of the legal case. Are you personally named as the Defendants or is the company named?

If it's just the company that's named then you don't need to take any part in the proceedings at all, and you can ignore them. The landlord will simply obtain judgment against the company, which is worthless.

But if you're named as the Defendants then the Claim Form in the `Particulars of Claim' section will set out the landlord's case, and it would have to provide full details of the personal guarantee, together with any letters before the court proceedings in which they claimed payment.

Please have a look at the Claim Form and let us know the answers, so we can provide guidance.

 

[Gary&Tracy]

Was it a limited company?

Yes, but the landlord says that we were personal guarantors for the rent.

 

[Gary&Tracy]

You need to read the original Claim Form that you would have received at the start of the legal case. Are you personally named as the Defendants or is the company named?

If it's just the company that's named then you don't need to take any part in the proceedings at all, and you can ignore them. The landlord will simply obtain judgment against the company, which is worthless.

But if you're named as the Defendants then the Claim Form in the `Particulars of Claim' section will set out the landlord's case, and it would have to provide full details of the personal guarantee, together with any letters before the court proceedings in which they claimed payment.

Please have a look at the Claim Form and let us know the answers, so we can provide guidance.

The claimant is the landlord, I am 1st defendant, and my wife is the 2nd defendant. We have not seen a copy of the original claim form, and we are waiting to see what he provides us with before the hearing. The landlord issued a CCJ against us, but used an address which he knew we did not live at. We asked the Court to set this aside, which they did, and now we have been allocated to the small claims track (preliminary hearing)

 

[Michael Loveridge]

We have not seen a copy of the original claim form ...

This is ridiculous. How can you defend a claim if you don't even know the case against you? Why have you still not got a copy of the Claim Form?

And how on earth has the case been allocated when I assume you still haven't filed a Defence (which you couldn't have done without seeing the Claim Form)?

 

[Mark T Jones]

Yes, but the landlord says that we were personal guarantors for the rent.

This is a key point

Did you take copies at the time of signing?

How has the LL responded to requests for copies?

They can't rely on them in court if they haven't submitted them

 

[Gary&Tracy]

This is a key point

Did you take copies at the time of signing?

How has the LL responded to requests for copies?

They can't rely on them in court if they haven't submitted them

We got a copy in our legal pack from our solicitor, but it's unsigned.

 

[Gary&Tracy]

This is ridiculous. How can you defend a claim if you don't even know the case against you? Why have you still not got a copy of the Claim Form?

And how on earth has the case been allocated when I assume you still haven't filed a Defence (which you couldn't have done without seeing the Claim Form)?

This was a result of the original CCJ case being set aside by a Judge. We have only received the notification of the preliminary hearing date.

 

[Mark T Jones]

We got a copy in our legal pack from our solicitor, but it's unsigned.

Did it include a PG?

 

[Newchodge]

This was a result of the original CCJ case being set aside by a Judge. We have only received the notification of the preliminary hearing date.

Does the notification tell you what the preliminary hearing is about?

 

[Gary&Tracy]

Did it include a PG?

What's a PG?

 

[Newchodge]

What's a PG?

Personal Guarantee. I think what Mark means is: did the legal agreement include a personal guarantee and was the legal agrement signed or othrwise accepted?

 

[Gary&Tracy]

Does the notification tell you what the preliminary hearing is about?

It just informs us of the date of the dispute resolution hearing and a set of requirements that need to be completed before the hearing, nothing else. It says that we have to provide each party, and the Court with all the relevant documents that we will be relying on, on the day.

 

[Newchodge]

It just informs us of the date of the dispute resolution hearing and a set of requirements that need to be completed before the hearing, nothing else. It says that we have to provide each party, and the Court with all the relevant documents that we will be relying on, on the day.

I thought you said this was a preliminary hearing? A dispute resolution hearing is different.

EDIT I strongly recommend that you contact the court office urgently and ask for a copy of the claim form. Explain you did not receive it because it was sent to the wrong address. You cannot possibly prepare for hearing (of any kind) without knowing what, exactly, is being claimed.

 

[Gary&Tracy]

Personal Guarantee. I think what Mark means is: did the legal agreement include a personal guarantee and was the legal agrement signed or othrwise accepted?

OK, Thanks. As I posted in another reply, we have a copy of the guarantee in the legal pack we received from our solicitor, but it's unsigned. Even if there is a signed agreement we believe that he has broken the law by using the F&F to furnish the premises for his own benefit. Surly the value of such should have been deducted from the alleged debt?

 

[Newchodge]

OK, Thanks. As I posted in another reply, we have a copy of the guarantee in the legal pack we received from our solicitor, but it's unsigned. Even if there is a signed agreement we believe that he has broken the law by using the F&F to furnish the premises for his own benefit. Surly the value of such should have been deducted from the alleged debt?

Is it part of the legal agreement document or is it separate? Do you remember physically signing it? Did you physically sign the legal agreement? Continuing responsibility for the rent is the first thing needed to be established. Whether there should be deductions from that debt comes afterwards.

You are going to struggle at court if you want to argue a breach of a law that you don't understand.

 

[pentel]

It might be worth concentrating first of all on answering the question "do you actually owe the landlord at all?".
Namely is there a personal guarantee. If the landlord cant show that there is then it is the company who owes them rent, not you.

 

[Gary&Tracy]

Is it part of the legal agreement document or is it separate? Do you remember physically signing it? Did you physically sign the legal agreement? Continuing responsibility for the rent is the first thing needed to be established. Whether there should be deductions from that debt comes afterwards.

You are going to struggle at court if you want to argue a breach of a law that you don't understand.

We don't member signing an agreement, even though we have a copy. We had to attend a different solicitor to the one that was dealing with the purchase of the business and assignment of the lease. This was to sign as guarantors for the bank loan as it would have been a conflict of issues.

 

[Gary&Tracy]

It might be worth concentrating first of all on answering the question "do you actually owe the landlord at all?".
Namely is there a personal guarantee. If the landlord cant show that there is then it is the company who owes them rent, not you.

The business was in arrears with the rent no doubt. But if there is no signed agreement as guarantors then the debt is unenforceable.

 

[Newchodge]

We don't member signing an agreement, even though we have a copy. We had to attend a different solicitor to the one that was dealing with the purchase of the business and assignment of the lease. This was to sign as guarantors for the bank loan as it would have been a conflict of issues.

Was the personal guarantee part of the legal agreement or was it a separate document, when you got it in the legal pack?

 

[eteb3]

Was the personal guarantee part of the legal agreement or was it a separate document, when you got it in the legal pack?

If it was separate, which did you sign first?

And did you sign the guarantee doc as a deed? (ie, it says it’s a deed and your signature was witnessed - tho the courts sometimes go easy on the requirement for a witness if it’s clear it was meant as a deed)

 

[Newchodge]

The business was in arrears with the rent no doubt. But if there is no signed agreement as guarantors then the debt is unenforceable.

You will also struggle in court if you don't answer the questions actually put to you.

 

[Gary&Tracy]

Was the personal guarantee part of the legal agreement or was it a separate document, when you got it in the legal pack?

In the legal pack we received as the original licence, and the License to assign. The original lease was signed by the original lessor and the License to assign is blank.

 

[Gary&Tracy]

If it was separate, which did you sign first?

And did you sign the guarantee doc as a deed? (ie, it says it’s a deed and your signature was witnessed - tho the courts sometimes go easy on the requirement for a witness if it’s clear it was meant as a deed)

We don't remember signing anything to do with the lease. In the legal pack we received as the original licence, and the License to assign. The original lease was signed by the original lessor and the License to assign is blank.

 

[Gary&Tracy]

You will also struggle in court if you don't answer the questions actually put to you.

How are we supposed to answer the questions when we don't know what the claimant is going to put forward as their evidence?

 

[Newchodge]

In the legal pack we received as the original licence, and the License to assign. The original lease was signed by the original lessor and the License to assign is blank.

PLEASE read the question.

 

[Lisa Thomas]

We seem to be going round in circles here. ..

Have you given a personal guarantee?

You keep saying the documents you have a copy of are unsigned, but do they include a personal guarantee?

 

[Gary&Tracy]

PLEASE read the question.

Which quest

We seem to be going round in circles here. ..

Have you given a personal guarantee?

You keep saying the documents you have a copy of are unsigned, but do they include a personal guarantee?

Agreed. Both the original lease and the licence to assign mention personal guarantee / guarantor.

 

[Newchodge]

Which quest

The one you quoted when you replied. The one that said only : "Was the personal guarantee part of the legal agreement or was it a separate document, when you got it in the legal pack?"

 

[Gary&Tracy]

The one you quoted when you replied. The one that said only : "Was the personal guarantee part of the legal agreement or was it a separate document, when you got it in the legal pack?"

The personal guarantee is on both the original lease and the licence to assign. Would it help if you saw the documents?

 

[Newchodge]

The personal guarantee is on both the original lease and the licence to assign. Would it help if you saw the documents?

No. So there is a personal guarantee setting out your obligations contained within the wording of the lease? Is it capable of being signed separately?