Rental/contract as a sole trader

[Sarah2408]

Hello all, hoping for some advice on Sole Traders and rental contracts of commercial property.

If a commercial property is owned by a Sole Trader Partnership (for this example we will call them Mark and Pauline trading as XYZ Company) and is leased to another Sole Trader (for this example we will call them Andrew) for a period of 5 years and in that time Andrew gets into financial difficulties and can no longer trade temporarily meaning he cannot pay his rent.

Mark and Pauline trading as XYZ Company are named on the tenancy agreement as 'Landlord' but their daughter Margaret is the one contacting Andrew for rent arrears. An agreement is put in place for Andrew to pay Margaret trading as XYZ Company until a new tenant is found but evicts him in the meantime.

the 5 years is up and the contract is no longer in place but Andrew is still paying the rent arrears to Margaret. All the letters from the solicitors and any other correspondence state 'Client - Margaret T/A XYZ Company'

Is this possible?
- Can their daughter *just* take over the financial aspects and demand the payments
- Can their daughter evict the tenant
- should the payments be made to anyone else other than the listed sole traders on the lease agreement
- Can an employee take rent on their behalf or would rent still need to go to those named on the agreement.

as they are Sole Traders there is no information on Companies House, I cannot find any employees and the business cannot be found online (not a website, no listings, nothing at all to show they even exist). HMRC Have been contacted and although not very helpful they state there is no company by the name of XYZ Company.

so further question - can you pay rent to a company that does not exist?

would it change anything if the company becomes Limited and adopts a new name?

There is a lot more to the story but they are the more pressing questions i have at the moment.

Thank you for any help and advice provided.

 

[Scalloway]

can you pay rent to a company that does not exist?

It could be a trading name. There is no legal requirement for a sole trader to register a trading name, they only need to disclose the sole trader's name in correspondence.

would it change anything if the company becomes Limited and adopts a new name?

If the company becomes limited you would need to know who actually owns the property. The limited company may be acting as an agent for the owner.

Have you discussed this with a solicitor?

 

[Sarah2408]

It could be a trading name. There is no legal requirement for a sole trader to register a trading name, they only need to disclose the sole trader's name in correspondence.



If the company becomes limited you would need to know who actually owns the property. The limited company may be acting as an agent for the owner.

Have you discussed this with a solicitor?

Thank you for your reply.

The Sole Trader and trading company is named on the agreement but the person demanding the money is a different person T/A the company. The Landlords have not been in communication.

It is very confusing as there are no records of the company owning the property but there are records of their child selling or re-mortgaging the property last year under a Limited Company Name. if the company had changed to a limited company or there were changes to the Landlord, the contract stated there should be a Counterpart, which has not been executed.

The family are all very 'dodgy' and know how to get around the laws, however having said that - from looking into the eviction process, I don't think it was a legal eviction.

We contacted a Solicitor when the Landlords child asked for us to sub-let but wanted payment direct to them and the solicitor stated that was illegal and not do it as it should go through our books etc, which is why the eviction took place. A different solicitor was contacted this week who stated 'you should have just done what he asked and sub-let'. We are gathering further information and evidence before seeking further legal advice - if anyone has any recommendations for good solicitors it would be greatly appreciated.

 

[DontAsk]

This is very confusing.

What is a "sole trader partnership"?

How does Margaret trade as XYZ when XYZ is the trading name of different people in a "sole trader partnership"?

The whole point of a "sole trader" is that it is ONE person, i.e., a sole trader. They can use a trading name (but still need to disclose their real identity. They can hire employees but employees are not "trading as".

 

[MBE2017]

The family might have asked this daughter to take on this responsibility for them, but I would have asked for a signed letter stating this before handing over a penny. Your case is always weaker once you have paid the money over.

Doubly so since this is a family, who are most likely to close ranks even if things were not done correctly. Proving anything is the problem.