Month by month lease. I've just received notice of change of use from A1 to A3

[f&vl]

My name's Ian and I'm the proprietor of a fruit & vegetable / health food and high-end grocery store in East Sussex. I require some advice from any one who can help. Thank you in advance.

My shop has been trading since the 01st December 2006. Originally it had a 3 year lease with an 18 month break clause if I decided to leave. (The landlord wasn't able to terminate the lease at this point, only I was, with 3 months prior notice). In December 2009 when the lease was due for renewal, the landlord and I arranged a meeting at the shop (on a Saturday) to discuss the new lease terms. He verbally agreed to the same lease. 3 years, with an 18 month break clause. He informed me that the rent may go up slightly so instructed a surveyor to visit the shop during the following working week with a view to have a second meeting at the shop on the following Saturday to discuss the new lease terms again. He never showed. After weeks of trying to get hold of him, a Tesco Express opened next door (which I knew several months before, was coming). It almost suited me at the time to continue the lease on a month by month basis to see what effect Tesco's had. Luckily we have a loyal customer base and it hasn't effected us a great deal (yet). The month by month basis was never agreed by the landlord, even verbally, but he continued to take the rent via standing order every month. So far I have paid 10 months without a lease.

Yesterday, the lady who owns 1 of the 2 bungalows behind the shop, came to me with a planning application for the change of use of the shop from an A1 to an A3. (Cafe). And also for the extension of the shop backwards at ground floor level (into the yard), and for a first and second floor extension (increasing the size of the current maisonette). This was the first I heard of the plans. The landlord hasn't even had the decency to send me a copy of the planning application or inform me of his plans. Although I've been paying rent on time for nearly 4 years. The planning application states that I am not an "owner" because I have occupied the premises as a lease-holder (not a free-holder) for less than 7 years.

I am wondering where I stand legally, if I do at all, because we verbally agreed to renew the lease for 3 years. I am worried about how soon he might ask me to leave the shop because I have a large amount of stock and will also lose the goodwill I've built up. It's a small, but profitable shop, and should sell for £15K or more + SAV.

The landlord intends to occupy the A3 premises with his wife to run a Cafe.

Ian

 

[Richie N]

Not sure there's much you can do without a lease signed but I'm no legal expert.
You could oppose the plans, maybe the neighbour will as well?

 

[f&vl]

OK thank you, I'd be interested to hear from any one in the legal field. We will both oppose the plans though.

Ian

 

[Angela Macready]

Hi there

You don't say whether or not you have yet discussed anything with the landlord but I am assuming you haven't. The first step I would therefore suggest is to speak to him and find out what is happening.

If he is intending to ask you to leave before you want to, you will then have to look closely at the documents you have.

As no new lease was prepared, it is more likely that the Court (if you went to Court) would consider the 'old' lease to be still in existance but that does depend upon what it says in it about what happens at the end of the fixed term as well as whether the landlord would own up to having agreed a new lease with you.

The next step would be to check the 'old' lease for how either party can terminate and whether it states that the Landlord and Tenant Act 1954 applies or doesn't to the lease. (As no new lease was prepared, it is likely that the terms in the old lease would still apply even if it was agreed a new lease had been created).

The Landlord and Tenant Act gives you more protection as the tenant of a business property and means that the landlord has to give you at least 6 months notice to leave (unless they are going to claim that you have breached your lease). However, you could have agreed at the beginning of the lease to contract out of the Act which means you do not have this protection.

All that said, speak to your landlord first. Find out whether you do have a problem or whether the landlord is simply planning for the future. I hope it is the latter and I just wanted to say how nice it is to hear that you are still doing well regardless of Tesco's opening next door.

Good luck with it all but if you do get into trouble, feel free to get in touch.