How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Thomas Your Own Question
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7432
Experience:  BA (Hons), PgDip, Practising Solicitor
Type Your UK Property Law Question Here...
Thomas is online now
A new question is answered every 9 seconds

We have a commercial lease and reassigned it with full agreement

This answer was rated:

We have a commercial lease and reassigned it with full agreement with the landlords. The new tenants have not paid the rent and have disappeared. We received a letter for rent arrears and contacted the landlords about what to do next . We have just tried to re enter the premises to clean it up and have been informed by the landlords that they have changed the locks. Does this mean they have forfeited the lease?

Thanks for your patience.

You need to see if you executed an Authorised Guarantee Agreement as a condition imposed on the assignment by your landlord. A lease drafted to normal modern standards will have this condition and I would be surprised if the landlord did not make you execute it as a condition.

This means that you guarantee the performance (ie payment of rent) of the tenant convenants by the person you assign the lease to. So, if they stopped paying rent then the landlord would be able to sue you for the amount owing.

If the lease was not forfeited then you would be able to instruct a solicitor to take an “overriding lease” which effectively means that you take the lease back and become responsible for it for the remaining length of the term. You would of course at this point look to assign it to another tenant and mitigate your loss.

If the landlord has changed the locks then this probably means that they have forfeited the lease and it is no longer in existence. You need to confirm this with the landlord’s solicitors. If this has happened then you won’t be able to take an overrding lease and will instead have to either settle or litigate on the amount owing to the landlord.

However, the landlord is under a duty to mitigate their own loss (eg, by reletting) so you would only be liable for the rent ot the point at which the landlord could reasonably be expected to re-let the premise.

Sorry it could not be better news. You need to cheek if you signed an authorise guarantee agreement with the landlord, if you didn’t then they can’t sue you. If you did then they can provided that they themselves have not breached the agreement.

Some further investigation is required, but it does not look promising I am sorry to say

Please remember to RATE my answer OK SERVICE, GOOD SERVICE OR EXCELLENT SERVICE or above if you are satisfied that you have received the correct legal advice (even if it is not the answer you wanted to hear), otherwise I do not receive any credit for answering your question.

If you are not willing to rate my answer as OK SERVICE, GOOD SERVICE OR EXCELLENT SERVICE then allow me to assist further by replying asking what clarification you require rather than rating my answer at levels below.

If you wish for me to provide you with further guidance on any question you may have in the future then please submit a further question to the board requesting me either by my profile or by marking your question. “FAO Tom”.

Kind regards,

Thomas and other UK Property Law Specialists are ready to help you

Related UK Property Law Questions