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Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7609
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hello. I rent a retail space in London and have a basement.

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Hello. I rent a retail space in London and have a basement. I have one share in a business which has been trading from my basement for the past two years. I am NOT sub-letting the basement. The owner of the business that is trading from my basement is emigrating to Australia on April 1st and has put her business on the market. I have asked her what exactly she classes as her business as she rents the basement from me. I am her landlord and in turn I pay my landlord his monthly rent on time every month. My landlord has been aware of this situation since day one and is happy with it. The owner of the business in the basement has told me that because she has been trading for two years, and I have never given her a written contract or lease, the fact that she has been trading and paying me rent for the past two years means that she is now classed as my tenant and so as a result has legal rights to the whole business.
I put my business on the market back in December and informed her of this and then in January she put her business on the market. While I am still waiting for a buyer for my business, she now has a buyer for hers.
I have informed her that as long as we remain here, she can happily carry on trading downstairs BUT if we sell (we are on the market as the hair salon upstairs to carry on as it is and have stated in the advert that there is a rent paying person downstairs) we cannot guarantee that the new owners will keep her business on as they may wish to use the basement for another use.
My "Tenant" downstairs now wants a contract to say that even if (when) we sell, she will be able to carry on trading downstairs.
Where do I legally stand here?

Thanks for your patience.

If it is the case that you simply have an oral agreement with her to occupy the area and your landlord simply has not objected to it and they will not have many rights.

Most likely they are either operating under an informal licence (for only reasonable written notice is required) or a periodic tenancy (which means that you would not have to give notice for the length of a rent period, a month if paid monthly, a quarter if paid quarterly),

She will find this out pretty quickly when her buyer’s solicitors looking in to the terms of her occupation.

I would avoid making written statements or statements of any kind that refer to a right to remain their post-sale by you though.

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Kind regards,

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