Limited Company but personal Guarantor

Options
HER
HER Posts: 219 Forumite
First Post First Anniversary Combo Breaker
in Small biz MoneySaving
We are in the process of purchasing a lease and an overview is below:

Lease: 10 years
Rent Review: every 3 years, next one in 2021
Break Clause: Every 3 years

On the contract for assigning the lease they have put my limited company but also myself and my partner on as guarantors. Is this common practice?

I guess this means that we are liable if anything goes down hill?

Thanks

Comments

  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 13 December 2019 at 10:53PM
    Options
    for a limited company probably comprising nothing more than yourselves as owners/directors, yes, bypassing the limited liability status of your company and making you personal guarantors is quite common and perfectly reasonable under the circumstances otherwise you could just walk away.

    you may want to read this thread about a guarantor where they now face the repercussions of that position when their business failed@

    https://forums.moneysavingexpert.com/showthread.php?t=5968816&highlight=guarantee
  • Savvy_Sue
    Savvy_Sue Posts: 46,028 Forumite
    Name Dropper First Post First Anniversary
    Options
    And you DEFINITELY want to have your own solicitor (one who knows about commercial leases) look over the lease before you sign. They will spot other potential problems.
    Signature removed for peace of mind
  • HER
    HER Posts: 219 Forumite
    First Post First Anniversary Combo Breaker
    Options
    They have found other problems and said the lease is very defective:
    No break clause so trying to add that but The deed of variation provided
    by the landlords solicitors is not good enough and I have set out the points of concern to them.

    Issue with the convenants and insurance as the landlord owns a parade of shops and flats upstairs which we are liable to pay if any damage occurs.

    The landlords solicitors are saying take the lease as it is and after you buy it they will co operate and voluntarily replace the lease with a proper one shortly afterwards. This means you have to trust the landlord but how much would this cost??

    Our solicitor is the landlords previous solicitor so I feel he is trying to push us in signing the contract and not explaining in clear details about the issues . This might not seem like it from the emails and the report but when you speak to him he comes across very rude and not supportive.
  • Savvy_Sue
    Savvy_Sue Posts: 46,028 Forumite
    Name Dropper First Post First Anniversary
    Options
    You want a solicitor YOU can trust to explain things. How have you ended up with the landlord's previous solicitor? I'm not sure I'd trust them.
    Signature removed for peace of mind
  • Pennywise
    Pennywise Posts: 13,468 Forumite
    Name Dropper First Post First Anniversary
    Options
    HER wrote: »
    The landlords solicitors are saying take the lease as it is and after you buy it they will co operate and voluntarily replace the lease with a proper one shortly afterwards. This means you have to trust the landlord but how much would this cost??

    Please don't do that. You have no rights nor protections if they suddenly change their mind. Don't sign anything you're not 100% happy with and never rely on any verbal assurances from the other party.

    HER wrote: »
    Our solicitor is the landlords previous solicitor so I feel he is trying to push us in signing the contract and not explaining in clear details about the issues . This might not seem like it from the emails and the report but when you speak to him he comes across very rude and not supportive.

    Then you need another solicitor. They're supposed to be on your side and should provide you with all the help and explanations you need.

    On both counts, I feel you should walk away - I've seen far too many cases where a tenant had been royally shafted by a landlord and their solicitor.
  • HER
    HER Posts: 219 Forumite
    First Post First Anniversary Combo Breaker
    Options
    What horrible cruel people. I just don't know why people would want to shaft someone just to gain some money. What a dirty world we live in.

    My partner has gone to see the solicitor today, so I need to get the latest update. I think the landlord has agreed to some variation of deed related to a break clause but need to find out about the covenants of repair/insurance as he owns 4 commercial premises along the high street including the one we want and 4-5 flats on top. So if any damages occurs to any of them, we are liable.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards