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leanne-jones, Barrister
Category: Law
Satisfied Customers: 183
Experience:  Barrister
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I am the landlord for a commerical premises being run as a

Customer Question

I am the landlord for a commerical premises being run as a takeaway. The tenant is one and half years into his 20 year contract which has no break clauses. When I went to collect the rent on Tuesday I found that the shop was closed. I have since discovered that that for the last two months he has been subletting the shop, without my prior knowledge, but his tenant has now left. My understanding is that no formal contracts were drawn up between him and his tenant. He is now telling me that he is struggling to pay the rent because his tenant has damaged the reputation of the business. I am not sure how long the shop has been closed for however it was open when I went to collect the rent last week. All equipment and fixtures are still currently inside the shop. I have tried calling him several times however he is not currently answering his phone.

I understand that I have a number of options available to me and was wondering in your opinion what would be the best course of action to take. Obviously since I have him tied to a 20 year contract I do not wish to relinquish this contract. In previous discussions with him he mentioned that he also has a takeaway in Morecambe. I have done a land registry search on this property and the good news is that the property is in his name and is owned freehold so I am assuming that if I took him to court this income generating asset could be sold to retrieve any outstanding rent.

I understand as laws currently stand I could use bailiffs to issue a warrant for rent distraint. However selling his equipment to recover rent arrears would mean that he would be unable to run the business and hence pay rent so might not be such a good idea.

I have ruled out forfeiture.

I could petition for bankruptcy however I am assuming that this would be just for rent owing and not for the full value of the outstanding lease. Is this correct?

I currently have a £3000 deposit however 9 weeks worth of rent has already been deducted from this leaving just £750.

Are there any other options available to me?

I guess in the first instance the wisest course of action would be for my solicitor to write to him demanding payment of rent. Also at the same time I would remind him of his responsibilities and just because the shop is no longer trading that he is still contractually liable for the rent. I would also suggest that he look for a suitable tenant to takeover the lease from him. Perhaps advertise in the local estate agents.

Could I agree that he pay a fee to surrender the lease but what in your opinion would be a fair amount considering that there is still 18 and a half years remaining on the lease?

If the tenant does not respond to the rent demand what would you consider the best course of action and is there anything which I may have missed in my analysis of the situation?
Submitted: 3 years ago.
Category: Law
Expert:  Stuart J replied 3 years ago.

Hello, I am Law Denning and I am a practising solicitor in a High
Street practice. I have been an expert on this website in UK law since 2008.
During that time, as you appreciate, I have answered thousands of questions
from satisfied users on a variety of subjects.

Because we are all in practice with clients and court and other
users, I might not always respond in
, particularly evenings and weekends. Please bear with me in that

It is my pleasure to try and assist you with this today. Please bear with me
while I gather some further information from you in order for me to be able to
advise you fully.

Realsitically, what chance does he have of starting again and paying? How easy will it be to relet?The first thing I would say is that you are under a duty to mitigate your loss and therefore I would start to look for a new tenant. The old tenant (I would not even worry about the sub tenant) is responsible for rent until the end of the term or until you get a new tenant.Meanwhile, provided you have not foreclosed on the lease, the tenant remains liable for the rates. That might be of tremendous financial benefit. I had a client who had a huge building which he was struggling to let on which the rent is £40,000 per annum. He was paying £20,000 per annum empty building rates. He has taken tenant saying who, to be frank, are probably going to be less than wholesome with regards XXXXX XXXXX the rent. He is not bothered because at least he is not paying £20,000 per annum rates. Meanwhile, he is actively still looking for a new tenant because the one who is in the property now is just in on a licence. He told me that he is not bothered whether the tenant pays rent or not provided the rates paid. Not a legal solution but makes good commercial sense.You cannot get blood out of a stone and notwithstanding the tenants claim that his sub tenant damaged his business with respect, that is bull. You no longer had a business because he given it to the tenant. If his business was that good, he would not have given it away within the first few months.I would do everything that you’ve suggested whereby your solicitor rights and demands the rent, reminds me of his responsibilities and advising that he should look for a new tenant. I would also time that he would responsible for any agents cost you incur in finding a new tenant.You cannot disclose of his property in the building without giving him a notice under the Torts Interference with Goods Act and you can only do that foreclose on the lease. There is no point in foreclosing on the lease until you have another tenant in my opinion. Who knows, the new tenant may want to buy the equipment which is in the building.Does that answer the question? I am happy to answer specific points.Can I help further?Please don't forget to positively rate my answer service (even if it was not what you want to hear). If you don't rate it positively, then the site keep your deposit and I get 0 for my time. It is imperative that you give my answer a positive rating. It doesn’t give me, “a pat on the head”, “good boy” (like ebay), it is my livelihood!If in ratings you feel that you expected more or it only helped a little, please ask. I am offline shortly until later and will pick this up then if needed
Customer: replied 3 years ago.

Relist: Inaccurate answer. Landlord is under no duty to mitigate his loss.

Summary of the Court of Appeal decision:

Reichman & Dunn -v- Beveridge & Gauntlett
Court of Appeal
13 December 2006


Landlord under no obligation to mitigate loss when seeking to recover rent due under a lease and tenant had abandoned the premises.

Source: Transcript [2006] EWCA Civ 1659

Expert:  Stuart J replied 3 years ago.

On the tenant's own admission, he has not abandoned the property. However as you clearly know the law, you do not need my advice.

There is lots of other case law which says that the landlord is under a duty to mitigate any loss and you happen to pulled out one case which support your assertion.

Opting out for another expert.

Expert:  leanne-jones replied 3 years ago.
Hello - my name is Leanne and it will be my pleasure to assist you today.

I see the expert has opted out. May I ask what is it you would like to ask of me today and I will see if I can help?
Customer: replied 3 years ago.

Hi there, basically just an accurate answer to what I have posted and what you would do if you were in my position. The previous expert mentioned that I had a duty to mitigate but I believe this is not the case and he said I can not dispose of the tenants property without giving notice under the torts interference with goods act however this is not true as I have previously sent bailiffs in to another property due to distraint for rent. I am not saying that this is the solution to my answer but an option.

Expert:  leanne-jones replied 3 years ago.
Duty to mitigate is common law and is generally accepted as that you have such a duty.

However where a tenant actually abandons the property, clearly it is favourable to show to a Judge that you have tried to get in new tenants rather than just sit around.

Remember a property empty is not necessarily earning and if the tenant has left, they may not have £ anyway.

What I would do is issue Court proceedings to forfeit the property. At this stage you can also claim for arrears and future losses. Once you get the order you can ask for Judgment for the sum as well.

This would then allow you to charge the takeaway and the debt would become secure. Of course this does not stop you taking other enforcement action.

But that is what I would do, get an order for possession and Judgment then you can enforce it. Without a CCJ for the sum you can not get a charging order.

If I can be of any further help then please do not hesitate to contact me.

Customer: replied 3 years ago.

Thanks for your reply. May I ask wouldn't forfeiting the lease in effect bring the lease to an end and therefore no rights to any further rent from the tenant?


Also when you say future losses do you mean I am able to make a claim for the whole of the lease term or just for the amount outstanding to date? The lease does still have 18 and a half years to run.


Finally when you say charge the takeaway I am assuming you are referring to the other takeaway which he owns personally.

Expert:  leanne-jones replied 3 years ago.
Yes the lease would come to an end but you can claim for future losses. It is breach of contract and in effect compensation is designed to put you into a position you would have been in should the breach not have occurred.

Yes you could claim for the remaining years. Yes I mean the other takeaway which he owns. I assume the current tenant is personal or if a company you have a personal guarantee

Customer: replied 3 years ago.

Thanks for your reply again.


Yes the current tenant is personal.


I am getting conflicting responses from a local solicitor I have just spoken to. He said if I were to forfeit the lease the only thing I could claim for is rent arrears up until the time of forfeiture. He says I cannot claim for any future losses.


Could you help me further please.

Expert:  leanne-jones replied 3 years ago.
You would also claim for breach of contract.

The problem you have is this - if the tenant does not own anything of value you would be throwing good money after bad by just waiting and waiting for years to see if he pays.

Whilst the agreement does end when you go back in, I accept that, the tenant is still in breach of contract and as such you can sue for breach which includes future and past losses.

I hope this answers your question and if I can be of any further assistance, please do not hesitate to contact me.

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