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Thomas
Thomas, Lawyer
Category: UK Law
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As a guarantor of a lease for business and the business is

Resolved Question:

As a guarantor of a lease for business and the business is going through financial problems, owing 2 quarters and now served with statutory demand under section 268(1) what rights have i got so that I don't loose my home.
Submitted: 2 years ago.
Category: UK Law
Expert:  Thomas replied 2 years ago.
Hi,

Is anyboday else named on the title to the property with you? Perhaps a partner/wife that lives there?

What sums are we talking about?

Tom
Customer: replied 2 years ago.

i am the only one on the title. The amount is £23,263 and this is guaranteed by 3 of us

Expert:  Thomas replied 2 years ago.
Ok.

Have you had any discussions with the landlord about whether or not they will forfeit the lease?

Has the tenant attempted to find any one to assign (ie. sell) the lease to?

Are you on good terms with the tenant?

Tom
Customer: replied 2 years ago.

FAO Tom only


 


Re assignment of the lease is already been considered. We seems to be in good term with the landlord.

Expert:  Thomas replied 2 years ago.
Drafting your answer. 5 mins.
Expert:  Thomas replied 2 years ago.
Hi

Thanks for your patience.

You should focus on encouraging the tenant to assign the lease. This is where unexpired term of the lease is sold to another tenant, who then takes over the responsibilities of the lease.

The landlord will require that the rent arrears are discharged before assignment (probably) and so the tenant or the guarantors will have to pay for this if this is what is to happen. You can attempt to find tenants yourself or instruct an agent to do it for you.

If you assign the lease though the landlord will likely rely on the assignment clause in the lease to insist that you all execute an Authorise Guarantee Agreement, which means that if the new tenant does not pay the rent then the landlord can sue you. If this happens you can re-take possession of the property to assign it to a further new tenant.

If the new tenant pays the rent then himself assigns the lease you would be released from all liability under the lease.

If sums are owed as a result of the landlord forfeiting the lease then they must first secure judgement against you all by suing you. This will afford you some time.

Once they have obtained judgement they can apply for a charging order against your house. They would probably get judgement on the rent arrears from the date of last payment up to the point at which the property is relet to another tenant, plus legal fees, plus costs of locating a new tenant, plus interest. If they get this (which they probably would unless you can offer a repayment plan) then they can apply for an order for sale. This is harder to get if the property is your residential home and your family lives there. You would have to defend on this basis.

The best way forward is to be proactive and constructive with the landlord together with the tenant and the other guarantors. You need to either assign the lease or agree a repayment plan in respect of the balance of the amount claimed by the landlord.

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Kind regards,


Tom
Thomas, Lawyer
Category: UK Law
Satisfied Customers: 6648
Experience: BA (Hons), PgDip, Practising Solicitor
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