Renting info

[wonderbee]

Its been about three months since I've been assigned a lease for two year, finishing in nov 2012, from the tenant (a large company X), who used to pay rent to the landlord.

I managed to pay 4k deposit to them and 4k rent for the first quarter to the landlord. Now the second quarter is fast approaching and I dont have enough money.
The tenant( the large company X) are my guarantor's.
So what does this mean and what would be the likely result if I'm unable to pay the coming quarter's rent. Would this affect my house, personal assets etc...??
What kind of problems would I face legally too?

The business is stuggling to pick up, am trying to use as much form of marketing as possible, however december is very very quite. Only hoping that January picks up.
What would be the consequence if after reviewing the business 6 months down the line we were making a loss and wanted to close the company as we couldnt afford to pay our way, even though we tried in every way to make it work????
What would the issues be in terms of paying rent, landlord, guarantor as we havent got the money or will be running into loss in the coming future if things go as they are..

Im glad the lease expires in 2 years and not stuck in it for ten years.

Please would someone kindly advice.
Regards

 

[kween]

Hmmm, a difficult one.

Can you not just close the Ltd down or try and sell the business at the price you got it, if your making a loss after reviewing the accounts fully.

I think, if company X are guarantors, the rent would fall onto them if you could not pay.
Unure with that one.

Could you not hand back the lease to the tenanant/Guarantor i.e. company X if things didnt work out???

 

[Help4landlords]

The scenario you are facing is fast becoming a common one in the UK and most of the world, so do not think that you’re on your own.

There are several options available to you, none easy during this economic climate.

You can advertise the remaining leasehold term to a commercial property agent or wherever you please in order to locate potential assignees (buyers), be warned though, even though you may have an interested party, the landlord has the discretion on whether the potential assignee would be a suitable tenant, however, generally (dependant on the terms of the lease) the landlord cannot unreasonably withhold consent. There would also be legal costs to consider such as who pays your legal fees, the potential assignees legal fees, the landlord’s solicitors and as is commonly becoming the norm also the landlord’s agent’s fees.

Another option is to inform the landlord that you are struggling to pay the rent and whether it would be possible for him to temporarily accept rent on a monthly basis as opposed to quarterly. There are other options available but these two immediately spring to mind.

If you fail to or can no longer afford to pay the rent then provided the previous tenant signed the Authorised Guarantee Agreement they would once more become liable to pay the rent.

If you acquired the lease in personally and not as a limited company then the landlord can potentially issue proceedings against you to recover the loss of rent, this can be through a CCJ being obtained against you or a charging order against your property to recover the costs, this is potentially some time away yet and would take a number of months to progress.

Do bear in mind though, the landlord cannot simply sit idly and watch the rent accumulate, he would be under an obligation to use his reasonable endeavours to rent the property as soon as possible.

Do visit our website where you will find answers to many landlord and tenant matters and debt recovery solutions, we also have a free advice line available 7 days a week help4landlords.co.uk.

 

[Lewy_T]

please tell me if I'm being harsh but you're having problems in paying your second quarter's rent as a new business?

I would first try and seek good business advice to see if your business plan is even viable and then take it from there.

Do not take offence but to go and spend £8k in 3 months and then not have any money left for your rent for the second quarter would worry the hell out of me if I was a shareholder or Director.

Maybe there could be some good advice here to help you improve your business? You mention trying to market you product?? How?

Bottom line, you could spend a fortune on advertising but unless the key people within the business are bringing in new business you may as well give up.

I'd be interested to know what you do and how you do it...

 

[liquidauctions]

Lewy made a very sound point.

I would never commit to anything like a lease untill i know the business is making enough without having to do anything extra to increase the turnover. If the premesis is needed to start up the business then i would go and get the cheapest one even if it was a little out of the way.

 

[Drpepper]

I, and also many others I know, have talked to the landlord and arranged monthly payments rather than quarterly (a large newsagent chain also recently did this as well, so it's not just us independents).

Only problem I can see is that you are subletting so the company you are asking to pay monthly will probably be paying quarterly. Then again then may already be paying monthly.

Waffle, waffle - sorry :redface:

Ask it can't hurt.

What is your business? Chances are January will be quieter still.

 

[Lewy_T]

I, and also many others I know, have talked to the landlord and arranged monthly payments rather than quarterly (a large newsagent chain also recently did this as well, so it's not just us independents).

Only problem I can see is that you are subletting so the company you are asking to pay monthly will probably be paying quarterly. Then again then may already be paying monthly.

Waffle, waffle - sorry :redface:

Ask it can't hurt.

What is your business? Chances are January will be quieter still.

You make a good point here, there are articles out there having a go at landlords for not moving with the times and going for monthly rent instead of quarterly. I think that the most famous one was Woolworths, they blamed part of their going bump on their inability to renegotiate their quarterly rent down to monthly within many city centre locations.

Cashflow is obviously a factor with loads of us during 'these economic times' but if your profitablity is not there either then you do need to revisit your business plan and get out there and find new customers for your business as well as trying to manage the cash flow by rearranging rents to monthly.

 

[kween]

So my previous tenants are the authorised guarantors, so everything would fall onto them if I could not manage to pay rent?

And where do I stand if I wanted to sell the business along with the lease? If i found a buyer whom was interested, and everything was assigned over to them, would i be liable for anything in the future, in the sense that if the new tenants failed to pay the rent, would that fall onto me? How does that work?

Appreciate all your replies.

Regards
kween