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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hi I was interested in taking over a commercial lease for 10

Resolved Question:

Hi I was interested in taking over a commercial lease for 10 years and instructed solicitors.

The legal paperwork has taken two months and the landlord gave me keys at the beginning to tidy up and I agreed that the lease would start from that date.

I have now seen an alternative property for less rent and no longer want to proceed.

Where do I stand with the first landlord. Do I have to pay two months rent arrears (which I am happy to do) and can I walk away or is lease deemed to be completed because I got the keys (ie I now have a ten year lease)

Please let me know


Thanks
Jana
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask has any rent been paid please to date?

Joshua :

Has any deed of assignment yet been signed by you in respect of the assignment of the lease to you?

Joshua :

Is the matter being dealt with through your solicitor?

Joshua :

Were you asked to sign any form of key undertaking by the landlord to return the keys or was this just an informal arrangement?

Joshua :

Have you done anything more than just tidy up to date?

Customer:

Hi

Customer:

I have only tidied up the place.

Customer:

I told my solicitors I was happy for lease to start on 12th January so they advised solicitors of this. I havent signed any formal lease or rent deposit. I have not paid any rent at all

Customer:

I havent signed any key undertaking however did sign a letter saying I would pay business rates and outgoings from this date

Customer:

Hello is somebody there

Joshua :

Thank you. On these facts it is most unlikely any formal lease could be claimed to exist. In order for a lease to be inferred, in the absence of written documentation, rent must be paid and occupation agreed or given. From what you say no rent has been paid and therefore there lacks a vital ingredient for a lease to be inferred.

Customer:

I did sign a letter saying I would take over liabilities from 12th January

Customer:

Does that mean anything

Joshua :

In addition to the above, it is almost certain that your solicitors are negotiating a formal assignment of the existing lease (or alternative a new lease for you) but in either event there is likely to be a deed of assignment for you to sign and also a rent deposit deed in respect of any deposit you have agreed to provide.

Customer:

Yes it is a new lease but we have not completed on the lease yet

Customer:

so does the letter I have signed mean the lease has begun

Customer:

or does the fact that I have not paid rent mean no lease has begun

Joshua :

Your solicitors should have used the "subject to contract or subject to lease" words on correspondence and if they have done so as they almost certain would and should have then this requires there to be a formal action in order to bring about an end to that arrangement. Notwithstanding the letter which I will address in a moment with your permission I therefore do not consider that a lease has begun here. However the letter...

Joshua :

Can you confirm exactly what the letter said please?

Customer:

That I was agreeing to take over the liability of the business from 12th January 2014

Joshua :

Are you able to confirm the exact words used and confirm who wrote the letter. What liabilities were you agreeing to specifically - e.g. what is the business you refer to?

Joshua :

Did this letter pass through your solicitors? Why did you agree to sign the same?

Customer:

business rates

Customer:

I didnt go through my solicitors and signed it when I took over the keys

Joshua :

Thank you. For what period di you undertake to take over liability? What did you get in return?

Customer:

I said I would take over liability from 12th January 20i14 for all business rates and utilities until completion.

Customer:

I got the keys in return

Customer:

I didnt want to start trading until I had formalised matters

Joshua :

Thanks. Finally when was this letter signed?

Customer:

When I got the keys on 12th j

Customer:

January

Joshua :

Thank you. I do not consider this changes the position with regards XXXXX XXXXX existence of a lease. I do not think a lease will exist based on these facts. However if you agreed to sign this letter in consideration of you being given the keys to tidy up and so on I believe the landlord will be able to claim from you business rates for the premises for the pro rata period from the date you got the keys and the date you hand them back as there would appear to be a contract made between you in this respect which satisfies the requirements of a contract.

Customer:

Okay but legally the lease hasnt commenced

Customer:

what if my solicitors didnt write subject to contract

Joshua :

Accordingly you may wish to consider returning the keys to the landlord together with a cheque for the business rates offered as "full and final settlement" in respect of the business rates for the period.

Customer:

just hypothetically

Joshua :

If he claims you have already leased the property you can deny this on the basis that you have not paid rent nor signed any lease.

Customer:

okay

Joshua :

If your solicitors did not write subject to contract then this would likely amount to negligence but it means that your solicitors could have indirectly committed you to a lease. It is a matter of standard practice to make initial correspondence subject to contract to avoid accidentally committing ones client to a contract without realising. If they have they would be liable to you. I very much doubt it is an issue though. I do not think the letter you signed would have any impact beyond the business rate liability as above irrespective of whether they wrote subject to contract or not.

Joshua :

Is there anything above I can clarify for you any further?

Customer:

Do they have to write subject to contract on all correspondence or just the first letter

Joshua :

No just once

Customer:

cool no more questions

Customer:

can i get a print out of this

Customer:

or sent to my email address

Joshua :

A pleasure. I hope you successfully negotiate a lease in respect of the new property you have found.

Joshua :

Yes you can either copy and paste the thread into a document or I can ask customer services to email you a copy if you prefer

Customer:

please if you could

Joshua :

No problem. If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Joshua :

I am about to log off - if you can kindly provide a rating using the smiley faces you should see this will complete the thread and allow me to refer it to customer services. If necessary I can do this later for you if you don't have time now.

Joshua :

Best wishes

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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