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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Dear sir/madame,I need some advise, the building in which

Resolved Question:

Dear sir/madame,

I need some advise, the building in which we have been in Longfield Hall (LFH) is in the process of obtaining a Capital Asset Transfer from Lambeth. The Nest Pre-School has been a major stakeholder of LFH since 1992, hiring the caretakers flat as sole occupiers and paying our rent to `The Friends of Longfield Hall now newly re constituted as The Longfield Hall Trust 2013.

The Nest Pre-School has now been asked to sign a Venue Hire Agreement/ licence that stipulates the same terms ie Rental /hour, assess, etc on basically the same terms as a 1 hour/wk yoga class. The purpose being LFH Trust wants to rent out our space immediately the day ends and also in the Summer Holidays, in order to show Lambeth that it is putting the Hall on a Financially sustainable footing.

However, they have acknowledged in their bid to Lambeth that we are non-profit making community pre-school, which ticks the boxes for the asset transfer. Nevertheless we are now facing significant rent rises, if I increase the hours for the next tax year 2014-5, 9-3.15pm Mon-Fri of £3319.50. Our rent was increased last year by £1000 from £5000 to £6000. As you can gather this level of continual rent increase is unsustainable. (The NEF funding alone for 3 year olds has remained at £4.08/hr for 5 years now.)

In the Business Premises one of the questions asks
Are the business premises
• Owned
• Rented
• Leased
And If you are a playgroup that does not have an agreement with your landlord then you should look into this further.

In 2010 Longfield Hall got a 15 year lease with Lambeth current Rent is £14k/yr,

The Friends of LFH’ income comes entirely from hiring out the hall. Users are mostly not-for-profit organisations. The Friends of Longfield Hall has started to push up its hire charges for long-term users. The board is also considering starting to charge the halls’ heaviest users directly for the gas and other services they consume. Currently, hire charges are all-inclusive

I am not sure if by accident we are in-fact tenants not licencees as LFH would like to think, we have put considerable financial investment into the building around 24K over 20 years, we have an excellent local reputation, and a long waiting list.

Does rented premises equate hire/licencee, or does a Pre-School by it’s the nature have to be offered a tenancy or lease agreement. We have always thought that we had a tenacy from the start as we have been sole occupiers as they admit

During term times, a self-contained part of the hall is used by a not-for-profit nursery, The Nest.

Supporting statement
Meeting for the ~Longfield Hall Trustees 31.3.2014

Will Ollard the Chair of Longfield Hall Trust “qualified that under the current arrangement the Nest do in fact pay pro-rata for the space over the summer break in line with their normal opening hours. It therefore can sublet the space for children’s parties etc.”
Under the new contract this will not be the case, as it is not proposed that the Nest pay for the summer holiday period. Greater reason to ensure space is utilised.
As you can see they want to change the contract, which admits we paid rent and had sole use of the self – contained part of the Hall over a yearly period.

Our aim is not to jeopardize the asset transfer but secure our tenure, with proper rent reviews.

In the venue hire agreement LFH trust offers us our current space l Section 1 Booking Details: Short term contract to Sept with the "intention to" then offer an annual contract. One of my parents suggested this is replaced with "commitment to".

If you are unable to advise me of what The Nest Pre-School, should do next could you suggest what course of action we should take, or what legal advise Lambeth might offer us.

Many thanks

Juliet Williams
The Nest Pre-School
Longfield Hall XXXXX
London SE5 9QY
M XXXXXXXXXX [email protected]
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 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 clarify that up until now Nest has been occupying exclusively part of the property and no one else has used this area please and for which Nest has paid rent for occupation but no formal documentation to regulate that occupation has been put in place please?

Customer:

Over the last 20 years its been used exclusively by The Nest, we have allowed and met parties who have asked to have children parties on Saturdays, there have been a couple of meetings here recently by the Chair of LFH with 2\3 people when the upstairs office is full.

Customer:

I have access to a copy of the lease as l am a trustee on the Board of LFH.

Customer:

Jousha I have a copy of a past licence issued by the Friends of LFH from 1997 is a licence the same as a Venue for Hire Agreement?

Joshua :

My apologies for the delay in reverting to you.

Joshua :

If NEST has had exclusive occupation of the premises and has paid rent for the same which has been accepted by the landlord then this would constitute an implied lease and if the occupation is for a commercial rather than residential purpose that lease would have protection under part II Landlord and Tenant Act whereby NEST would have security of tenure under part II of the above Act.

Joshua :

Accordingly Nest should be able to insist upon a continued lease on the same terms though there is a requirement to pay a market rent for the continued lease which will either be agreed between Nest and the landlord or failing which can be determined by court hearing evidence from qualified valuers

Joshua :

based upon what you say, Nest does not object to the landlord using the premises at certain times of the week or year for alternative activities. this arrangement however is incompatible with a lease because lease requires exclusive occupation such as that which Nest has enjoyed to date. accordingly, if Nest is content in principle to accede to the landlord's proposals then a licence will need to be agreed. an important difference between a licence and a lease among others, is that a licence does not grant exclusive occupation and also there is no right to renew a licence beyond any right or condition that is contained within the licence agreement

Joshua :

based upon what you say, Nest would appear to be any reasonably strong negotiating position in respect of the landlord in so far as it is likely to benefit from security of tenure as discussed above based upon its exclusive occupation of the premises. as above, there is a requirement that rent is paid at market rates and therefore if nest cannot afford market rent, this would of course place it at a disadvantage as against the landlord but subject to this, Nest should be able to negotiate reasonably strongly.

Joshua :

based upon what you say, if considering agreeing to a licence arrangement with the landlord, in order to give up its present tenancy with security of tenure, Nest will require a long licence potentially with an option to renew the licence for a further specified period. In addition, rent will need to be agreed together with any break clause provisions allowing either party to end the agreement early. I do not consider that a proposal from the landlord whereby Nest gives up its tenancy status in return for a vague promise of a future licence agreement is satisfactory as it places the future of occupation of the property and indeed almost all thenegotiating weight for the go shooting such future agreement in the landlord's hands

Joshua :

Based on what you say it is likely that nest will wish to negotiate a formal long licence agreement in the above terms at this stage before agreeing to give up any form of tenancy or security of tenure for which both parties will likely wish to appoint a solicitor given the potentially long nature of any such licence agreement

Joshua :

is there anything above I can clarify for you?

Customer:

joshua thank you for your advise, as stated we have had exclusive use, and I have a copy of the licence,re: Licence Fee Section 2.1 In exchange for the obligations to be undertaken by The Licencees The `licensor agrees that the Licencees shall be entitled to use the Property for use as a playgroup for children only together with The Facilities and Services for a period of Twenty four months commencing on 1 May 1997 at the folowing fees:

Customer:

In the only paper work I have - a copy of the licence 2/5/1997 under licence fee " in exchange for the obligation to be undertaken by the Licencees , The licensor agrees that the Licencees shall be entitled to ues the Property for the use as a playgroup for children only together with The Facilities and Services for a period of twenty-four months commencing on 1 /5/1997.

Joshua :

Thank you for the above. On the basis that the licence you refer to above long since expired and the landlord has continued to accept rent and Nest has enjoyed exclusive occupation, this would not appear to change the position that Nest has the basis to claim it has a lease at present and therefore the position would still appear to remain as above.

Joshua :

Is there anything else I can help you with?

Joshua and other Law Specialists are ready to help you