Commercial Lease - When to pay legal fees

delermd1

Hi

Our commercial property that we currently lease has been sold during the latest lease agreement, and we are now at the point where the lease is due to expire and we are looking to extend it.

We met the new landlord and he appears to be ok, however we have been asked to cover his legal costs as part of the new lease agreement.  We have spoken to his solicitor to get clarification that the terms of the new lease are as discussed with the landlord, and that the terms are to stay the same as they were in the original lease, however he is refusing to clarify anything until we have paid him these legal fees (£1.2k).

Does this seem normal?  Previously we have been able to negotiate what the lease terms would be (which should be pretty easy given we believe the terms are to be the same as they currently are) and we've then paid the fees once these terms have been drawn up into the lease.  The fact he is refusing to clarify some of these terms is just leaving me a bit uneasy, and I didn't want to be in a position of paying this money over to be told the terms aren't as expected and that, if we feel they're unreasonable, no lease is signed and we've basically given him £1.2k for nothing.

Our main concerns are that our previous landlord required us to be personal guarantors just for the rental payments, he is refusing to confirm whether this will be the same or whether they are wanting us to personally guarantor the whole lease which we would not be open to doing.  

If we were to pay the money and the lease wasn't to be drawn up because we couldn't agree terms, what would be the chances of us claiming the money back?

Thanks in advance for your help

Sandtree

delermd1 said:

If we were to pay the money and the lease wasn't to be drawn up because we couldn't agree terms, what would be the chances of us claiming the money back?

First of all, is your lease in or out of scope of the Landlord and Tenants Act?

If its inside there is a statutory process of renewal that needs to be followed; if its outside then it all comes down to what the contract says.

You should seek professional advice to understand your rights

daveyjp

Legal fees are all part of the negotiation with the new landlord.  If you don't want to pay you don't have to.

You really should have your own legal advisor or surveyor to negotiate the terms.

Whether you are protected by Landlord and Tenant Act 1954 is really important.