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Thomas
Thomas, Lawyer
Category: UK Property Law
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Experience:  BA (Hons), PgDip, Practising Solicitor
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I have a 10 year lease on my pub with Punch. Ive had the pub

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I have a 10 year lease on my pub with Punch. Ive had the pub for 4 years. The manager I had in there running t for the last 3 months has over night done a flit!! taking all the stock, money and a lot of the f and f. Ive only just recovered financially from the last manager doing the same after the police objected to him running the pub, so I really can not financially afford to keep the pub running. Ive spoke to the BRM for the pubco and he has told me to sell it, he says I can not surrender the lease. Ive told him openly and honestly that I have not got the mney to get it going again and quite honestly he isnt interested. I really feel like just shutting the door and posting the keys through the letter box,although this is not like me at all. Where do I stand?
Submitted: 7 years ago.
Category: UK Property Law
Expert:  Thomas replied 7 years ago.

HelloCustomer/p>

 

I sympathise with your position, it's obviously very difficult.

 

As I am sure you are aware, you are bound by the terms of the Lease that you signed with the Landlord (I assume this to be Punch). You should therefore refer to the Lease and check to see if contains any break clauses. These are clauses which specify when you are able to terminate the Lease upon serving the requisite notice under the Clause. If there is no such clause then the only way in which you may released from the Lease is by the lease Term expiring, but plainly if there is a significant period of time remaining until the term expires then it will not be of much use to you.

 

Your other option is to check the lease for the "alienation" clause. This clause specifies whether you are permitted to assign (ie. sell) the lease to another person and in what circumstances. You will need the Landlord's consent for this and the clause will likely say what the Landlord will require in order for them to grant their consent. They may very well require the incoming Tenant to provide with references (eg. bank, trade and accountants), guarantors and also that you enter in to an Authorised Guarantee Agreement (if the lease was signed after 1st January 1996). Check the clause but it will almost certainly require that you are up to date with your rent payments (and that there are no other outstanding breaches of the Lease terms).

 

If you enter in to an authorise guarantee agreement you will guarantee the liabilities of the incoming tenant (if the incoming tenant defaults the Landlord will be able to come after you for the sums owed).

 

Were you to assign the Lease to an incoming tenant and then that person in turn assigns it to another then you would be released from you liability under the authorised guarantee agreement.

 

You should also check to see if the Lease allows you to sublet it. This will also be contained in the "alienation" clause referred to above.

 

You could contact your BRM and ask if he is able to refer you to a commercial agent who commonly deals with pub lease transactions. He will then market the Lease in attempt to find you a suitable incoming tenant. Failing that you should search online for commercial agent in the local area.

 

If you were to simply post the keys through the letter box then the Lease would continue regardless and you would still be liable for the rent until the Landlord forfeits the Lease because of your default and recovers possession of the property. Doubtless he would then sue you for the outstanding money that you owe under the Lease (or possibly take your personal property as distress for rent). It is better to attempt to deal with the Landlord than to bury your head in the sand I'm afraid.

 

If your reported the theft to the police and your former manager was charged and convicted then you may be able to obtain compensation. This would seem to be some way off in the future of course.

 

I am sure this is difficult reading for you but I hope you can acknowledge there is little reason in my sugar-coating you position.

 

However, I hope this is useful to you. If so, please kindly click "accept". Feel free to ask any follow up questions.

 

I wish you the best of luck.

Customer: replied 7 years ago.
I am able to reassign or sell the lease, but I have told the BRM that financially I am not able to trade whilst awaiting a sale. It says in the lease that they can take the pub back from you if you fall 14days in arrears with the rent. If I dont pay the rent, how long would it take them to get me out? What could they charge me then? I dont own a property and I dnt have any other assets or money. The pub has totally drained me over the last 2years.
Expert:  Thomas replied 7 years ago.

Customer,

 

Once you have fallen 14 days in arrears with your rent the Landlord is then entitled to forfeit the Lease. He may do this by issuing proceedings at Court for the money you owe (for which there would be a a slight delay while their lawyer prepares the application), or by simply physically re-entering the property and taking possession of it (which could obviously happen immediately). At this point you would no longer have a right to occupy the property.

 

Your Landlord could not charge you; non-payment of rent under a Lease is not a criminal offence. They could sue you for the money you owe in a civil court. If you do not have any saleable assets but you are in other employment they could apply for an attachment of earnings order which would deduct money from sums earned through your employment. If you really do have no other assets of value and are not employed then you could be made bankrupt.

 

If you end up owing money to your Landlord then you should adopt a constructive approach pleading poverty and tell them what you can pay and how often. If you show them that you do not dispute the debt and are willing to start repayment they may accept that this way forward is preferable to the administrative hassle of issuing proceedings (although the cost of those proceedings would be added to the sum they sue you for).

 

I hope this helps, if so please kindly click accept.

 

Kind regards,

 

Tom

 

 

 

immediately re-enter the property. At this point the term effectively ceases and the lease is terminated.

Customer: replied 7 years ago.

Last question!!

What would they chase me for, just the rent owed for the 2 weeks or would they try and get the rent for whats left on the lease? the invoices I owe at the moment will be more than covered by the deposit they have of mine and I own all the f and f.

Expert:  Thomas replied 7 years ago.

They would be after the rent you owe from when you stopped paying up until the date of forfeiture (plus legal costs and other items "reserved" as rent in the Lease (eg. Insurance, any service charge)).

 

Note that it is not a straightforward decision for the Landlord. If they think they can easily re-let the premises then they will be much more likely to initiate forfeiture. If they do not think they can re-let then they may choose not to forfeit and leave you in the property (ie. accruing rent arrears) until they are sure they can re-let the property. They would then issue an action for the arrears of rent.

 

A final point to note , if they do issue proceedings you can apply for relief from forfeiture at the court's discretion (so as to extinguish the forfeiture and continue the lease). Usually though, the court will only grant relief once the breach has been remedied (ie. by paying the arrears and costs), so again it all depends on your ability to pay the rent.

 

Tom

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