Property Lease Advice

[Paul Kelly ICHYB]

• Someone I know has had a business at a property since 2008.
• A few years ago they renewed the lease until 2030
• Landlord has sold property
• New landlord has given them marching orders
• It appears that the original landlord did not register the lease with the Land Registry

My gut feel is that this will be an issue between the original landlord and tenant, as they neglected to register the lease and might have not told the new landlord everything.

However, my ultimate advice is speak to a property solicitor (yes, you guessed it, something they have not done at any point in the past....), but I would appreciate any thoughts.

 

[rach88]

1. A landlord cannot register a lease. It is the tenant's responsibility to register.

2. Was he in occupation of the property at the time of the sale? In which case (I believe) his interest in the land, in so far as it relates to land of which he is in actual occupation, is an overriding interest - it is binding on a purchaser even though it is not registered.

 

[WaveJumper]

I would only add to this the new owner must have known someone was in occupation when they purchased the property, so other than this issue of the lease apparently not being registered, there seems to be more behind this, as for all intense and purposes they would have a tenant for quite a few years are they looking for an excuse due to the current rent being low, are they activating a break clause, or undertaking some major building works.

Whatever your feelings on the above @Paul Kelly ICHYB as you say seeking some proper legal advice is the way to go as it sounds like its going to get messy

 

[Paul Kelly ICHYB]

1. A landlord cannot register a lease. It is the tenant's responsibility to register.

Found that out when reading up and is just another reason why people should use solicitors! The leases were renewed every 5 years, so not sure if the 7 year lease requirement in cummulative or per lease/extension.

They have been in occupation constantly throughout the process, so that could be a little beam of light......

 

[Paul Kelly ICHYB]

looking for an excuse due to the current rent being low

That's my gut feeling.

are they activating a break clause, or undertaking some major building works.

No, just saying the lease isn't valid because it wasn't registered...

 

[rach88]

Found that out when reading up and is just another reason why people should use solicitors! The leases were renewed every 5 years, so not sure if the 7 year lease requirement in cummulative or per lease/extension.

They have been in occupation constantly throughout the process, so that could be a little beam of light......

You say that a few years ago they renewed the lease until 2030 - so that is more than 7 years?

 

[WaveJumper]

That's my gut feeling.


No, just saying the lease isn't valid because it wasn't registered...

Paul my gut feeling too probably hoping this will be holding a gun to their head and possibly the opening salvo for negotiation keep us posted as to how you get on best of luck

 

[Paul Kelly ICHYB]

You say that a few years ago they renewed the lease until 2030 - so that is more than 7 years?

That's one of several questions I have that I am waiting for them to get back to me on.

 

[kulture]

As usual all these type of posts come down to what does it say on the lease? Take it to a solicitor and get professional advice.

The new owner may have assumed that they were getting vacant posession. The lack of a lease registered on the Land Registry may have helped that assumption. HOWEVER there is a lease. It gives the tenant whatever rights are detailed in the lease. I do not believe that the lack of it being registered invalidates the lease.

The tenant has the issue with the new owner. This new owner may well have an issue with both the tenant and the old owner.

 

[Michael Loveridge]

This is a mess, as the tenant has what's known as an `equitable lease'. This may be enforceable against the original landlord, but not against the new landlord, which means that both landlords also have a problem.

Another point to consider is whether Stamp Duty Land Tax may have been payable. If the rent payable during the lease was over the SDLT threshold then it would have been payable, and as well as the SDLT itself there will also be interest and penalties to pay.

Legal advice definitely required.

 

[Solvelaw]

The Land registry will have discretion to take a late registration or has done so in my experience but this has to be done sharpish. The Landlords signed lease is with the Tenant and vice versa. I would strongly urge to get that copy to the new landlord so as to regularise matters as much as possible. It may be a tactic to try and get the tenant to surrender the equitable lease for a new lease at much higher rent. Happy to help if necessary.....