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Break Clause in Commercial Lease
HER
Posts: 219 Forumite
I am not sure if this is the right thread but I need some advice.
I am in the process of having a commercial lease transferred (purchasing) in to my name. The lease is 10 years, the rent is 17000 annually, rent review is every 3 years, next one being in 2021 but there is NO break clause in the contract.
The solicitor mentioned that I can sell the lease but its my responsibility to find the person and the landlord has to agree if I decide to sell. However, I would still be responsible until the lease runs out if the person defaults on the contract unless that person sells it on.
Any advice and thoughts on this please?
I am in the process of having a commercial lease transferred (purchasing) in to my name. The lease is 10 years, the rent is 17000 annually, rent review is every 3 years, next one being in 2021 but there is NO break clause in the contract.
The solicitor mentioned that I can sell the lease but its my responsibility to find the person and the landlord has to agree if I decide to sell. However, I would still be responsible until the lease runs out if the person defaults on the contract unless that person sells it on.
Any advice and thoughts on this please?
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Comments
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What advice or thoughts do you want in addition to what you've already been advised by the (your?) solicitor?0
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The advice you have been given is correct.
If / when you sell the lease on, you need to make sure you sell it to someone of substance0 -
Sorry - just worried that i don't have a break clause in the contract and its an 10 year term. Its a long time with out a clause.0
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Then either negotiate one as part of the deal (and expect to pay for the privilege) or find other premises where you might be offered what you're looking for.Sorry - just worried that i don't have a break clause in the contract and its an 10 year term. Its a long time with out a clause.0 -
Thanks I will see if i can negotiate to get this in the contract.0
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Into your name? Or into a limited company's?
If you need to get out of the lease part-way through, is it likely that that's because the limited company's going south...? In which case, you cannot be pursued for its debts unless you've given a personal guarantee or debenture as part of the lease.
If you're a sole trader, then a £170k+ contract suggests a reasonably sizable business. Wouldn't it be best to get it limited...?0 -
Then either negotiate one as part of the deal (and expect to pay for the privilege) or find other premises where you might be offered what you're looking for.
The OP is not in negotiation with the landlord - they are in negotiation with the current tenant. I can't see why any landlord would agree to vary the lease on an assignment - its just not what is done.
A ten year lease (or the residue of it) is not particularly long - or short - its more or less usual.0 -
Like I said:SmashedAvacado wrote: »The OP is not in negotiation with the landlord - they are in negotiation with the current tenant. I can't see why any landlord would agree to vary the lease on an assignment
They may of course not be interested anyway, given they've currently got a (fairly) certain income for the next ten years. But they might be prepared to talk about it, and it is quite common for leases to be varied at the time of an assignment.expect to pay for the privilege0 -
Sorry it would be in a limited company. No break clause and therefore a risk to have for 10 years. I think it’s a deal that’s just to risky
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