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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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We had a hotel on lease and we have a lease with Laundry equipment

Resolved Question:

We had a hotel on lease and we have a lease with Laundry equipment company JLA that was signed in my personal sole trader name. Had alot of complications on install and their own person would not sign off on the equipment as installed or safe.

We have since left the equipment and negotiated out way out of the hotel lease that required the equipment.

They are now taking action for £30k. we were told by the salesperson that we could also change the name of the entity over later as we were waiting for the lease to be signed in the name of our company that way taking the hotel lease.

We vacated the property on the 14th December and advised JLA of such, I believe the equipment is no longer there also and may have been stolen. As they have said they have not picked it up.

Any help appreciated.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : Thank you for this but I am not certain what your question is please?
JACUSTOMER-nr7gbtqm- :

Basically how to defend the claim based on what I have said above.

Alex Watts : When did you have the equipment installed?
Customer:

Around June 2013 We had to pay three months in advance. They took one payment before we stopped paying. And they sent out contractors to do the work. When their person came out she would not sign off on the work.

Alex Watts :

You can't get out of it for not being safe etc - because its been there since June 2013

Alex Watts :

If you were that bothered about it you would have stopped using it straight away or indeed a short time after

Alex Watts :

In terms of changing the name, the same above applies - this is because you have waited too long

Alex Watts :

If you were concerned about changing the name you could have done it or started the process in June 2013

Alex Watts :

If you knew what you were signing then sadly you are liable for it

Alex Watts :

If there are ongoing losses you could defend that portion on the basis you are no longer in control of the machinery etc.

Alex Watts :

But you could not defend the arrears up until you left for the reasons above

Alex Watts :

The Judge would also have expected you to read the documents before signing

Alex Watts :

I am sorry if this is not the answer you are looking for and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

They wont know if we did or did not use the machines. Also the machines are not on site we dont know where they are.

Customer:

Ok so how would you defend the ongoing losses.

Customer:

Because that is the main cost the balance of the lease which is 8.5 yrs approx.

Customer:

Also if they are stolen whos responsibility is it since we left the property on the 14th december and notified them around that date.

Alex Watts :

If the lease was 8.5 years then you are responsible for that entire period.

Alex Watts :

If you leased it then you are responsible. Because you should have returned the equipment when you left.

Alex Watts :

If you lease it, you do not own it and are therefore responsible for it.

Alex Watts :

Can I clarify anything else about this?

Customer:

Ok so if the machines are returned.

Customer:

what would be the best case of trying to negate the balance of the lease

Alex Watts :

If they were returned then you would be liable for arrears and loss of profit for the remaining term.

Alex Watts :

Does this help?

Customer:

Ok at the moment they are going for total payments etc for the balance being around 25k - 30k

Customer:

if they are returned that drops to to 25k

Customer:

approx

Customer:

how can I limit the balance on the 8.5 years.

Alex Watts :

Sadly you can only argue it should be loss of profit.

Alex Watts :

That is your only way.

Alex Watts :

Or declare yourself bankrupt if you do not own any assets and you would be discharged within 12 months

Alex Watts :

All debts would be wiped clean

Customer:

Not an option.

Customer:

What would loss of profit equate to

Alex Watts :

They would need to provide that figure. But it would be rental period less costs of expenses

Customer:

So rental period being 6 months

Customer:

less their costs

Alex Watts :

Yes, so the actual profit they would have made.

Customer:

Considering they have the machines etc worth around 6k odd I imagine their profit side of things is massive

Customer:

My other option was to offer to buy the machines

Alex Watts :

Yes you could do that, it may be cheaper.

Customer:

Ok so I am expecting claim form next week, so steps are

Customer:

1)Dispute claim

Customer:

2)Go to court on the day and use Loss of Profit as defence

Alex Watts :

Well I think you need to make a partial admission because you admit some of it.

Customer:

3)Fall back position offer to purchase machines

Alex Watts :

Yes.

Customer:

I was going to start with unsafe installation etc

Customer:

then work my way down.

Alex Watts :

Well that;s a non starter - because you waited so long

Alex Watts :

Can I clarify anything?

Customer:

I think it actually took them till sept october to get out their to do the inspection.

Customer:

they never actually commissioned the machines as installed and working

Alex Watts :

I dont think that is your strongest point.

Alex Watts :

You waited too long to raise that

Customer:

so there is no other way to attack the fact that it wasnt installed correctly

Alex Watts :

Sadly I do not think that is your best point. If you had raised it straight away and complained time after time it would have been ok.

Customer:

I know there was some compaints by my hotel manager but it basically just got left

Alex Watts :

But file a part admission

Customer:

where can i get more information on the defence of loss of profit.

Alex Watts :

Then contact the company and try and negotiate a setlement

Alex Watts :

That's not a defence in itself - you are asking for them to mitigate their loss

Alex Watts :

Which could be loss of profit

Customer:

They did mention mediation on their letter which i found strange havent seen that before

Alex Watts :

Can I clarify anything?

Customer:

So u would not start of with offering to purchase the machines.

Alex Watts :

Yes

Customer:

Direct to the company or wait till the claim form comes.

Alex Watts :

I would wait until the claim form comes

Customer:

ok.

Customer:

Thanks yes happy with answers much appreciated.

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