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Hey hive mind;
I work for a small division of a company in a small building separate to the main office, that we lease from a private landlord.
He is selling up and has a buyer that is basically happy to continue us as tenants, but obviously our lease is with the current owner and we need one with the new owner. We have agreed verbally that the lease (which runs to 40-odd pages, is full of jargon, and was agreed by the company solicitor prior to me joining) will be on the same terms as the existing one but obviously with dates and parties changed.
The new buyer and agent want to send the new 'draft' to our solicitor for checking - but if it's exactly the same we'll just be paying a solicitor fees to check the wording is the same which i can do myself.
Do I have to use a solicitor for that, or can we agree and sign without 'taking advice'
(of course, if they do send me the new lease and it is different in any material aspect then we'll have to get advice anyway)
I don't think there's anything to stop you signing the lease wthout advice.
Coffers tight just now?
always tight when the owners of the firm are Yorkshiremen 😉
My understanding is that the landlord merely has to inform you that he has sold the property and give you details of the new landlord (& possibly a Rent Authority letter) - no new lease required. If you both want a new lease, there should be an official surrender of the current lease alongside the new lease.
It doesn’t sound as though the lease is of a rent and duration to attract SDLT, which might be a consideration if being re-granted.
(There is a q of continuing obligations on the landlord, which depend on whether the lease was granted before Jan 1996. This may encourage some landlords to grant a new lease.)
I would agree - the lease doesn't end because the owner is selling. The new owner becomes the landlord and the lease continues. You would just pay rent to the new landlord.
If you do surrender the current lease - which would have to be agreed by both parties, you of course leave yourself open to having a new less favourable lease imposed.
There are a lot of technicalities even in relation to short(ish) duration leases. One example is that if your company's lease is not a contracted-out one you have security of tenure. If you surrender that lease you are giving up that security.
It does sound like you would benefit from some advice. I would speak to your solicitor.
It's both easier and more complex.......
we've been in give or take 6 years, we had a 3yr lease first time and then a second 3 year lease which was identical in terms of obligations for maintenance, access, all that stuff, but modified to include i/ break clauses on an annual basis; and ii/ staged rent increases capped at inflation on the same timeframe
The second 3*1 year lease ends in September, but the new purchaser / owner wants us to stay for another 3*1 year on the same terms. In that time - we may move to larger premises or go bust.... he might decide that at the end of the 3 years he wants to return it to domestic premises...... who knows.
That's the easy bit, so we have effectively no lease to surrender; the complex bit is that if we were to decide not to stay (and we could theoretically close down or go to another, eg: managed premises, in 2.5 months time if we wanted) then the new buyer doesn't really want the premises empty, while there are many other empty premises in the area.
So we're staying on the basis that the lease doesn't change materially; he's only buying if we stay which means the lease needs to stay the same materially; and the current owner is keen for both to complete because he wants the money out to retire.
So no incentive for anyone to particularly change any of the details beyond the names and dates. However, he does need to involve his solicitor for the purchase and because he does need a whole new lease even if it is identical to the existing one, and his solicitor is strongly suggesting that we also involve a solicitor. Which i can't see any need to, as long as the lease doesn't change (our solicitor's already approved it 3 / 6 years ago) unless there is any legal obligation to - as boring as it sounds I can go through the current and his draft and check it's word for word the same myself. And if it does change we ask i/ why has it changed; and ii/ if that is necessary, we can ask our solicitor at that point.
In principal, yes; you don’t need a solicitor. I’ve just finished drafting a commercial lease for a current tenant to sign and neither he nor I are instructing solicitors.
Picking up on jakester’s point, is yours a contracted-out lease? There should be reference to such in the lease, and one of your directors will have signed a declaration, a copy of which may be held with or attached to the lease. With the new lease, a new notice will need to be served at least fourteen days prior, and a new declaration signed as well.
I can think of one other matter- non-residential leases dated after 1st April 2018 need an EPC (energy performance certificate) of E or better. Your current landlord will need to provide an EPC on the sale, so should be aware if the rating is below what is permissable for leasing.
If there is a difference in the lease or some technicality you wish you’d know about a few hundred quad may suddenly seem cheap.
Not a fan of solicitors but also not a fan of getting bitten in the arse. Personally I’d get it checked.
not saying we (I) wouldn't check it, word for word, with the existing one. That would be daft! 'Here, sign this, it's exactly the same as the last one your solicitor reviewed and approved'
as boring as it sounds I can go through the current and his draft and check it’s word for word the same myself. And if it does change we ask i/ why has it changed; and ii/ if that is necessary, we can ask our solicitor at that point.
We aren't complete cheapskates, the solicitor has reviewed it initially, and then again when it went from a 3 year to a 3*1 year to ensure that was the only change, question was whether there was any legal obligation to involve a solicitor to basically do a proof reading job.