Surrendering A Commercial Lease Advice

[Zlatan]

Hi,

I am surrendering a commercial (shop) lease and the landlord has accepted as long as I pay his solicitors fees. I think I know the answer but would I need a solicitor for this as well and if so does anyone have any recommendations (finances are a bit tight at the moment - when aren't they?!)?

Thanks in advance.

 

[MOIC]

Solicitor, Yes.

Recommendations, start locally and get several quotes for comparison.

 

[Zlatan]

My landlord has now lined up another tenant and taken a deposit. My break clause is until May 2019 and he's now asking me for £6k (plus will keep my £3k deposit) to surrender my lease and to be released. I have no funds available and he needs an answer in a few days. What do you suggest I do as I'm all over the place at the moment?

 

[STDFR33]

What is the £9k that he wants actually for?

 

[kulture]

You are suddenly in a stronger position. The landlord needs you out in order to move the new tenant in. You need to tread carefully and the details matter. Are you renting as a company? Do you have any personal guarantee, and if so do you have any realisable assets that the landlord can get.
It is possible that you can put a case to the landlord that you have no money, and that he would be unlikely to get any from you. I would tell him what you can afford, and no more. He will then either have to accepot this and thus be able to give a new lease to the new tenant, or he will have to take you to court and thus potentially loose the new tenant.

The important thing in this is to ensure that the landlord gives the new tenant a new lease and not assign your lease to them.
If they go the new lease route there is less need to use a solicitor, but this is always a risky option.

 

[Zlatan]

I am renting in my own name and there are no assets of any value in the shop (I had already removed them into storage). Yes, he's getting the land registry details placed into his own name and potential new tenant will then pay for his solicitors fees. Thanks for the advise - wish me luck!

 

[Zlatan]

What is the £9k that he wants actually for?

It's supposedly a discount - instead of paying £1k pm for the next 18 months to take me to my break clause he's "releasing" me of this obligation

 

[kulture]

It's supposedly a discount - instead of paying £1k pm for the next 18 months to take me to my break clause he's "releasing" me of this obligation

and its a valid offer. BUT in the situation he is in and you are in, a lower offer is more realistic.

 

[MOIC]

Are you in arrears and has the landlord sent any correspondence in this regard?

Make an offer as to what you can afford.

1K (if you can afford it), plus he keeps the deposit is a good starting point.

Get advice from a competent solicitor and get them to finalise the surrender details.

Depending on the wording of the lease, you must sever all your ties and obligations and paying a small percentage of what is potentially outstanding, is probably the prudent thing to do.

Ensure all utility meters are read and everything has been settled.

Good luck.

 

[Zlatan]

Rent has been paid until December. Can't really afford to pay him anything but your suggestion of £1k plus deposit is what I had in my mind to keep things amicable and hopefully to draw a line under matters. Thanks for the advice by the way

 

[MOIC]

Given the above circumstances, I would start by saying (and demonstrating) that you have no funds, as well as no assets (this is an important point) and that you are in debt with your business and that in order to surrender yourself from the lease and ALL it's obligations, you are prepared to offer £1000 in full and final settlement.

If you have assets in your name, which a landlord will easily search, this will complicate matters and in such an event, it's vital to have a competent solicitor overseeing the surrender.

I wouldn't worry about being amicable, this word is not in a landlord's dictionary.

Just get the best deal for yourself.

 

[Mark T Jones]

The m guessing your landlord is an independent rather than a big corporate, hence the reasonable offer

In addition to the above advice, you might consider if ther3 are any concessions you can offer in lieu of cash suck as redecoration the premises.