Landlord selling & wants us out

stosirhc

Hi.
I can't seem to find the answers to my questions despite spending several hours trawling Google, and I appreciate this is a house buying/selling forum, but I couldn't find one for commercial property.

We current occupy a retail unit and have done for the last 4 years. When we moved in we didn't sign a lease, it was fairly informal, we just paid the deposit of 1 months rent along with the first months rent and were handed the keys. I'm not sure whether it makes any difference but it wasn't the landlord who initially gave us the keys and took the rent money, but the person who occupies the unit next to ours, as the landlord isn't local he was holding the keys for the landlord. We paid the initial rent & deposit in cash and since then have paid all rent via standing order direct to the landlord.

All has been fine for the last 3 1/2 years, however the landlord decided they'd like to sell last July and wants to do so with vacant possession. They wrote to us in November to tell us we had 3 months to leave and hand back the keys. The problem we have is locally there is very little else that would suit our needs and budget, we'd be looking at 8 times the rent elsewhere (granted the unit's would be bigger but this currently suits our need), we've also built up a business here and if customers turned up and found we were closed they may just go elsewhere and we'd lose business.

I believe, from what I've read, that because the landlord didn't give us an actual lease it falls back to the default law of the LL&T 1954, and that we have security of tenure (Which I've told the landlord, and that they haven't served us with a section 25 notice), which sounds great in principle but what does it actually mean in so far as if we turn up for work one day and the landlord has changed the locks (or the key fob for the electric shutters) what do we do and who do we contact? With the potential for that to happen could we pre-empt it and change the locks ourself, or would that breach the default tenancy agreement? As far as I'm aware we've never breached any rules of the default tenancy agreement, we've always paid rent on time (as it's paid by standing order), and the building is in a reasonable state of repair.

I know we may need to employ a solicitor who specialises in this field but having spoken to a couple they tell us we're looking at approx £250-£300 PH, and although we can afford for some legal advice when the need arises, I'm trying to keep costs to a minimum initially as we're not making it hand over foot.

Any and all help would be appreciated.

da_rule

As you say, you have, from the sounds of it, a protected lease under the 1954 Act.

Therefore there are only 2 non-fault grounds on which the lease can be brought to an end (‘determined’). The first is because the landlord has a real intention to develop the property (probably not likely if it’s in a centre). Following a Supreme Court ruling last month, the planned development cannot be contrived purely to bring the lease to an end. The second is because the landlord wants to occupy it himself.

These are called ‘non-fault’ as the end of the lease does not stem from a failing of the tenant, unlike, for example, determining the lease because of persistent non-payment of rent.

If the landlord claims one of these non-fault reasons you are entitled to compensation for disturbance. The compensation is linked to your business rates and how long you’ve occupied the property. You can oppose the notice and seek relief from forfeiture from the court if you want to challenge the reason(s) given in the landlords notice.

Likewise, if you turn up one morning and the locks have been changed etc then you can also seek relief from forfeiture and also seek damages for the breach of the lease (damages in the region of the amount of lost trade you’ve suffered).

From what you’ve said, just wanting vacant possession on a sale is unlikely to be a valid reason. In fact business units are sold with sitting tenants all the time, and in some cases are seen as a positive. However I suspect that you are seen as something of a hinderance as you have a lease which is implied, and falls within the Act. Therefore things such as rent reviews, break clauses etc will not exist so the lease is likely to be not particularly marketable.

You have a number of options:
1) Wait and see and be prepared to make emergency court applications if you do turn up one day and find the locks changed.
2) Let the landlord know (which it seems you have) that you have a protected lease and the reasons he’s given don’t constitute a lawful reason for determination so you won’t be going anywhere.
3) Put a value on how much the lease is worth to you and offer to surrender it if the landlord pays you (don’t forget to include costs of moving stock, redirecting post, changing addresses on bank and utility accounts etc as well as your fees in renting a new place and any other costs you may incur).

You do need some professional advice so I would suggest paying for a couple of hours so that a solicitor can write a strongly worded letter to your landlord setting out your position. It would also help to have one briefed and up to speed in case any emergency applications are required.

Also, make sure you keep paying the rent. I know this seems obvious, but some landlords will purposely refuse to accept the rent in an attempt to end the landlord and tenant relationship. I’ve heard of landlords closing bank accounts etc. So if any payments do bounce back make sure you have a record of it, contact the landlord and tell him, and send a cheque to what ever address you may have.

[Deleted User]

If you haven't already got the LL's address, get it from the neighbouring unit before things get too heated.

stosirhc

Thank you Da_Rule for your very in-depth reply.

The building is in a block of shops of which they don't own all of them, so it would be unlikely. With regard to them occupying it themselves, as it's a shop would them have to have proof that they intend to occupy it for their business purposes? i.e. They couldn't just say they do, but then not.

In reply to your message deannatrois, the address we have for the LL is the flat upstairs from our shop, however this isn't their main residence, the LL lives miles away and just uses this as a sort of holiday home, unfortunately we don't have their main address. I have sent any letters recorded to this address, however as the guy in the neighbouring unit has known the LL for 40 years he will sign for any mail, which he then puts in a jiffy bag, one of the LL's friends then collects it and forwards on to the LL. Would this suffice for the sake of saying the mail has been delivered or do we need to look at another method of acquiring the LL's main residence address?

I've tried to explain to the guy in the unit next to me that as he is in the same boat as me (security of tenure) he doesn't need to move out, especially as if he wasn't to then it would add more weight to my case, but unfortunately he's just accepting that the LL has asked him to move out and he thinks he has to, despite me explaining that the law is on our side.

Da_Rule, what would your thoughts be on us pre-empting the locks change, and doing so ourself before that happened? Also with regard to the above address situation, would we then send cheques to the flat upstairs if the LL did cancel their bank account?

Rosemary7391

How did you get that address for the LL? If you've got a letter from the LL indicating that that is the address you should use "for the serving of notices" or similar you should be okay.



You could also check the land registry entries for your unit and the flat (think it costs £3 for each) and see what address is held there.

stosirhc

The only letter we have ever had from the LL was from Nov '18 when they just asked us to leave with 3 months notice, they put no address on it of theirs.

I've tried land registry but the unit that I occupy doesn't seem to have it's own title, nor the flat upstairs, only my neighbours unit. It's worth pointing out that at one point the shops & flat upstairs were all one unit, then was split up many years ago, it now has it's own access for my unit, my neighbours, and the flat, it also has it's own business rates etc.

da_rule

As you don’t have a written lease which might prohibit the changing of the locks, I cannot see why you couldn’t.

If the neighbouring unit is owned by the same person then I would get the title register for that from the Land Registry. You may find there are multiple titles (freehold and leasehold), I’d spend a few quid and get them all.

There’s no reason to send anything recorded. In fact, sending things recorded is often discouraged in litigious circumstances (unless a lease specifically calls for recorded post to be used). Under the Interpretation Act 1978 a letter is deemed to be served provided it is posted to the correct address, therefore proof of postage is evidence of service. If the recipient wants to claim they didn’t receive it then this is very difficult and the onus is on them to prove it. However, with signed for, they can prove that they didn’t sign for it and can therefore rebut the presumption of service.

In terms of the landlord wishing to occupy, yes they would have to actually occupy. Although there have been cases where the court has allowed some flexibility if there was a sudden change of circumstances etc. In this case you have been told why the landlord wants the property back. It would therefore be quite difficult for them to change their story.

martindow

Have you spoken to your neighbours to see if they have received anything similar or have contact details for your landlord? From your OP it seems as if they acted as an agent for the LL when you first moved in.


I suppose stopping paying rent would provoke a response from the LL and you could pay once you are given an address. It's not normally recommended, but if they want you out anyway...