Apr
26
Commercial lease, can I get out of it?
By
I have a commercial lease on a retail premises it is a 10 year lease with about 8 and a half years to run, break clause at 5 years. When the new owner takes over I will HAVE to sign an “authorised guarentee agreement” covering the landlord should the new owner close down (so I am screwed if they fail or dont work as hard as we did - not fair) My question is:
1) At the break clause in 2 and a half years time if the new tenant decides to keep trading, am I still liable?
2) Is there any way I can say I will not sell the business with that clause?
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3 Comments
April 28th, 2010 at 4:49 pm
Ahhhhh tell me why your asking this question here rather than a lawyer? The answers you get here will most likely be worth about what you paid for them (excluding this one of course).
April 29th, 2010 at 1:24 am
Assuming you have a standard lease, and assuming you are sub-letting; the answer to your question is as follows:
(i) At the 5 year mark, you can exercise the break clause (or you can do so now in advance if you wish) in which case your liability (if any) crystallises at that time.
These are usually for dilapidations) which you should, under the sub-lease be able to pass to the sub-tenant (or his sub-sub tenant)
(ii) Of course you can, but what happens then? You have to retain the lease and the liability yourself in which case youa re liable anyway.
April 29th, 2010 at 4:20 pm
I think you can exclude your assignee or subtenant from security of tenure part of Landlord and Tenant Act so that if you exercise the break the new tenant will not be entitled to remain in occupation on your lease. Therefore your obligation ends when he takes on his own lease.
An AGA is built-in to many leases now from the outset and you should have objected when your lease was drawn up - not now.