voluntary liquidation help help help !!

[mdavy]

we may be forced to go into voluntary liquidation long long story over a dispute with our landlord wanting to increase rent for our business premises from 23,000 to 38,000
We always wanted to settle amicably & have offered 24,000 25,000 and even 28,000 despite our surveyor saying market value only 24,500 his surveyor says it 38,000
clearly a dispute and now decision is with the arbitrator
anyway on the likely scenario we have to go down voluntary insolvency we are a limited company it has been drawn to my attention that the lease we signed is in the name of us (as individuals) not in our ltd company name although we have always paid the rent for past 6 years from our limited company account and the landlord also addresses correspondence to us and the ltd company name
we will lose so much that we have personally invested and my team will lose their jobs but we cannot see a way ou and it now frightens the hell out of me that even if the company becomes insolvent i will still have to pay the rent for the property with no business because the law society lease is in our names !!
help

 

[bwglaw]

...it has been drawn to my attention that the lease we signed is in the name of us (as individuals) not in our ltd company name

Then the individual parties named equally share personal liability for the term of the lease.

we have always paid the rent for past 6 years from our limited company account and the landlord also addresses correspondence to us and the ltd company name

The lease may well contain a clause to cover situations where a payment from a third party does not create any rights or any liability. In any event, even if the company was a party to the lease then the Landlord would be at liberty to enforce the lease against the Ltd Co and the individual parties personally.

You can either challange the Landlord on the fairness of the rent increase or assign the lease.

Given the consequences, you should seek direct legal advice on the matter soonest.

 

[mdavy]

Thanks for prompt reply I think I understand.. basically the ltd company is 50/50 myself and husband
we dont know why we had the lease drawn up in our names def an oversight from us and solicitor as the ltd company has been registered since day 1
so if the ltd company goes into liquidation we as individuals will still have to pay the rent for the next 3 years!
no one will take lease on as it is a salon in a village and the 38k is just way too steep!!
and I know he has us over a barrel

 

[bwglaw]

Many commercial landlords prefer and often insist on the lease being in the names of individuals especially where there is a lack of security. Usually a Head of terms is drafted and agreed upon before drafting the lease, in this it should state who the parties to the lease will be.

You and your husband should see a local solicitor as soon as possible and go over the lease and discuss your options, one will be to challenge the rent review as being unreasonable, and usually there is a clause in the lease setting down how parties should resolve the dispute.

 

[mdavy]

thanks again
I will go to see a solicitor but a bit nervous as the decision on the rental market value has been decided by the abitrator
If the abitrator says the rent is 28,000 or less then we can claim our costs back off landlord and any difference in rent is paid immediately however if the rent is decided at 38000 we have to pay his costs and pay the difference immediately
the fee due to abitrator is 2,500 hence why i thought despite all the money we have lost and the potential to sell the business in the future it would be easier somewhat not to incur any more debt and shut down
I just dont know which way is best to close business either voluntary or be forced either way I will still have to pay the rent maybe
its all too scary... and for us and I am sure like others it could not come at a worse time ... we dont draw a salary as we have manged to keep staff on and we are both looking for work we have someone to rent a room and we share a car between 3 of us in the family
it just seems we have worked for nothing and if recession wasnt bad enough we have screwed ourselves and potentailly others a we may have to fund the rent for another 3 years
the lease we have is a standard law society lease i dont knopw why we did not have advice to put in our company
and why we did not agree the break clause in line with rental review then because had we known he wanted so much we could have opted out at 3 months beforehand
Our landlord has not been forthcoming at all and has not met us half way he has gone up to wanting 38,000 and i should have jsut rolled over paid him as I seem to have no rights!!

 

[bwglaw]

the decision on the rental market value has been decided by the abitrator...

Other than to seek direct legal advice, sit tight and await this decision. I cannot honestly see the rent increasing from £23K to £38K as I don't think you took on the lease that long ago I presume?

 

[mdavy]

lease taken on 5 years ago
and cannot sit and wait decision as have to pay up first for decision !!
total 3k plus 2k for surveyor
then if in his favour got to pay his fees plus the difference in the new rent for past year
I feel i have no choice but to go into liquidation now but so scary

 

[bwglaw]

Obtain initial advice from a local solicitor go go through the lease and to review the facts the solicitor should be able to advise you of your options as to whether accruing further costs would be a safe risk.

I would not give up just now

 

[Dave Shaw]

I think there are a few issues here:

1. parties to the lease - you may have a claim against your legal advisors if you thought it was going to be in the name of the company however you would be expected to have checked the parties before signing it so it may be difficult to pursue this side of things.

2. If sounds a little strange that the landlord is invoicing rent to the company if the lease was in your personal names. I'm sure you have probably checked a number of times but if not then check the signed lease to make sure that the final version was in your personal names. As per other posts legal advice is probably a must.

3. Liquidation of the company - if the lease is in your personal names then the liability may reside there and as such you need to consider if it is necessary to place the company into liquidation - if there are some assets and few liabilities it may be possible just to close it down.

4. Personal debt - if the lease is a personal debt then you need to deal with this; I would assume both parties to the lease have joint and several liability. How you deal with this would depend upon your personal circumstances - again take advice. It may be possible to minimise your losses by subletting the property (or continuing to trade the business) or if it becomes unmanagable take more drastic action.

If you wish to discuss drop me a Private Message.

David Shaw
totalitysolutions.com