Lease issues

[Pete_MK]

My shop lease ends in December. The shop had been trading successfully for over 50 years, with the original landlords, those landlords died & the portfolio was passed on in the family.

Like others shops with the same original landlord we have been bound by covenants which originally stopped anyone trading in the same goods as their own shops (no Grocers, florists etc). They closed their shops, but insisted no trader significantly duplicated another tenants trade.

With the new generation, they sold some of their own shops to a developer & told us it would be redeveloped as a supermarket. Since its opening most of the shops have seen a downturn in trade of 90%, where there is duplication.

The shops are blighted now, we cant sell as a successful businesses, I have lost over £100K in value & dropped £200K in turnover.

We believed we were covered by a covenant to stop duplication, it was a significant part of the decision to buy, but the landlord is not interested. Other shops have said they will give up the shops & walk away, mid lease. My lease ends in December, my shop is worthless, Im not making any money & I fear that if I dont take another lease I will be hit with dilapidations to resolve 50 years of use.

Before the redevelopment I had a good business, the landlord destroyed my business with his actions, can I do anything to get any redress or be able to walk away with no further financial implications?

 

[obscure]

Sorry but, based on what you have said, I don't see that you have any basis for a claim against your landlord or anyone else.

1. The covenant was there to protect the landlord's own shops from competition from tenants, not to protect the tenants. The fact that the tenants later decided not to compete with each other was their own decision and in no way binds the landlord.

2. The landlord didn't destroy your business. All they did was sell some property. What happens after the sale is nothing to do with the landlord. They can't be expected to see into the future and keep land they don't want/need because your business can't compete.

3. Unless there was an actual covenant or other legal restriction included as part of the sale of the land (which nothing in your post indicates is the case) the new owners are free to do what they want, including competing with existing businesses.

Conclusion
Competitors moved into your area and proved to be more efficient/popular, resulting in a decline in your business. That is obviously unfortunate for you but in a capitalist society there is no right to be protected from competition.

I am old enough to remember when the local Sainsbury was a tiled emporium with marble counters around the walls behind which shop assistance stood and sold you produce from the shelves behind them. It is long gone (it's now a Thai Restaurant) and a bigger Waitrose now holds sway.

Is it sad when long existing local businesses fail in the face of competition from (often) global faceless brands. Yes. But businesses have no legal right to be protected from fair competition. If they did my previous house would still be occupied by the local coal seller with his horse drawn cart (and the sheds at the bottom of the garden would still be stables).

 

[Pete_MK]

The original landlords, the leases, the rents & the approach were akin to the original Cadburys philosophy, people took on these shops on that basis. The new landlords have taken a Kraft approach including upward rent reviews of 60%.

1. The covenants stand, when challenged the landlord insists they would not be removed, it isnt a case of not deciding to compete against each other - they would sanction anyone not observing them.

2. The landlord stated their intention was twofold, to obtain cash for the themselves as an inheritance & by purposefully contacting a developer who was seeking to build a supermarket here, they would expect to push up the rent rate for each of their other properties.

3. My point wasnt about competition, its not about the business that has gone in, it was about the new landlord cherry picking the parts of the covenants it wants to enforce & to ignore others. Had it been built on another plot of land, not held by my landlord I wouldnt be here asking, its because the landlord sought out someone to buy who would be duplicating 6 of his own shops, in 1.

A simple 'sorry covenants dont apply to the landlord' would have been fine.

A bakers - closed
Off licence - closing
Sandwich shop - closing
Newsagent - for sale
Greengrocer - closed

 

[ethical PR]

Pete if you want to get a professional legal view on this - why don't you approach a commercial solicitor - as a group of traders and see what they say. As you mention sums of hundreds of thousands - an initial investment of a few hundred pounds for an appointment with a solicitor will give you a view on whether you might have a case.