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Stuart J
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 20907
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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Hi I am renting a commercial property for a alternative medical

Resolved Question:

Hi
I am renting a commercial property for a alternative medical centre (acupuncture, massage, counselling etc).
My landlord is selling the property (it has 14 other offices and shops).
His agent called today and advised that we sign a lease as the old lease run out in April (I kept paying rent each month because I though the lease was automatically carried out).
The agent suggests it's best for me to sign it with today date or we can put April as a date - it's up to me he said.
I know the agent - it's unlikely he started thinking about us - tenants and doing it for us :-) unless he changed, which could happen.

Anyway - my question is:
1. If I sign it for one more year - which I want to do - would the new landlord be able to increase my rent or would he be obliged to accept the terms and conditions on the lease?

2. Can the new landlord kick us out earlier than the new lease expires? They plan to apply for planning permission and transfer it to residential.

3. Out of curiosity - am I correct that the agent needs me to sign it to prove the profitability of the building and secure the tenants to make the deal with the new owner?

Many thanks in advance
Best Wishes
Olga
Submitted: 1 year ago.
Category: UK Property Law
Expert:  Stuart J replied 1 year ago.
Thank you for the question. It is my pleasure to help you with this today. Please bear with me if I ask for more information.


If you want to stay in the property for another year from next April, the sooner you signed the new lease of the better.

Under the terms of the old lease it may be possible for you to automatically renew in April, but if you sign now, for a 12 month term to start in next April, the landlord cannot change his mind.

The term can still run for 12 months from next April, even though you sign now.

If you sign now, the rent will be specified in the document, and therefore the landlord cannot increase it, unless the new lease says that he can.

He cannot legally kick you out before the new lease expires, once you have signed it and exchanged documents, unless you stop paying rent and then you only need to be two weeks in arrears before he can change the locks.

It can be a consideration that the landlord needs to prove to a buyer that there are tenants in the building paying rent and you have a lease, although a 12 month lease is not really of that much benefit and it is debatable whether it is any benefit at all if the end proposal is to redevelop the property from commercial to residential.

Does that answer the question?

Can I answer any specific points arising?
Customer: replied 1 year ago.

Hi Law


 


Thank you for your prompt reply. Appologies if I ask the same questions as English isn't my first language so I need to make sure I understand.


 


Just to clarify:


 


1. The agent suggest to sign the new lease and dates can be April 2013 (7 months ago - when the old lease expired) or November 2013 (actual date now). By reading your answer I understand that I can choose whatever best for me - which would be November 2013 as it would give me another year.


 


2. What do you mean by: "If you sign now, the rent will be specified in the document, and therefore the landlord cannot increase it, unless the "new lease says that he can.


 


So if the new landlord decides to increase the rent for this commercial property he can only do it if there is such option in the lease I sign this week?


 


3. It's great that he cannot kick us out. However I sroped paying service charge some time ago due to several issues at the property (we had no lights in the common areas and I have pregnant collegue so after two weeks of chasing landlord and his agent - we decided to fix it ourselves, the same with other issues). I informed them that untill they resolve outstanding issues I will only pay rent and keep £189 per month (service charge). They didn't reply (it was 8 months ago) so I continued paying just rent. Can it affect the 2 weeks lock change thing you mentioned?

Expert:  Stuart J replied 1 year ago.
Thank you.

No problem at all clarifying.

You did not say April 2013 and I assumed you meant next April.

It changes things slightly.

Once a document is signed, the landlord cannot change the rent, unless the document says that he can.

The document runs from now until whenever it says it expires.

There are two things in the lease document relevant to the dates:

1 the term that it lasts for and

2 when it is signed.

Until it is signed, it is not effective.

It can be signed now but to run from next April for 12 months or two years or five years or whatever.

It can be signed now but to run from last April for 12 months or two years or five years or whatever.

It can be signed now and run till next November or 2 years or 5 years or whatever

You can backdate the term of years and it can start whenever you like, but the date of the signature must be the date the document was signed.

It does not matter whether the term of years starts from last April, or from now, November or any other time

If you want it to run until next November, the lease can specify that it runs from last April until next November or it can specify that it runs from this November until next November.

You are correct that once you have signed and exchanged leases with the landlord, he can only change the rent if there is an option in the lease to do that.

Not paying the service charge can be grounds to lock you out, depending on what it says in the lease.

What you should do if you have done the repair yourself is to ask the landlord for those costs.

You should pay the service charge up to date if you want to be safe from being lcoked out.
Customer: replied 1 year ago.

Thank you for clarification


 


The reason I stopped paying service charge because there was no service for some time (no rubbish bins provided for almost a month, no cleaning, broken windows in the common area were not replaced for weeks etc). So I though if words don't work - maybe financial loss will change it. It didn't help though. So in my mind - I don't pay service charge and they don't provide service the way they should do. It's fair. But I see your point.


 


As I didn't pay the service charge and I didn't have any lease contract in place since April this year does it mean that if I sign the lease now - I may get more problems for me not paying the service charge? I mean I technically had no lease contract since April 2013 and therefore didn't sign any agreement to pay the service charge, but if I sign it backdated I may be in trouble and will need to pay the outstanding amount? In this case shall I sign it from now - November 2013 - rather than backdate it from April 2013? Or it doesn't matter and they can request the service charge anyway?

Expert:  Stuart J replied 1 year ago.

I can understand fully why you stop paying the service charge, but it does put you in breach of the lease and what you should do is pay the charge and then sue the landlord for breach of covenant to provide service if he will not refund you or provide the service.
I know that it’s really annoying that is how it works.
You have a liability to pay the service charge by virtue of the fact that you have been in the property and paid rent and presumably you had a lease before April 2012, and therefore the obligation continues under the terms of the old lease is what is known as a “tenancy at will”.
So they can request the service charge anyway.
At the moment, you have no lease so they could simply give you notice to leave in four weeks even if the service charge and rent paid up-to-date.
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 20907
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
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