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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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Hello. I would be very grateful if you could help me. I have

Resolved Question:

Hello. I would be very grateful if you could help me. I have rented a commercial unit since 2012 under a Licence for Occupation agreement with the Landlord. Originally drawn up to run for three years. I pay the rent quarterly and a rent increase is due in June. Unfortunately my business cannot sustain the rent any longer and immediately after paying the last rent installment, I informed them of my intention to leave the premises, thereby giving them 3 months notice. The Landlord has now immediately put the Unit up for sale and it will go to auction on June 11th and is using the photos of the unit with all of my business signage on it. I understand that is what the building looks like currently but I have just met with him and he is very angry that I will be removing the signage and my outdoor decoration (window boxes) and replacing the bespoke front door with his original door that was there when I started renting. He seems to think that he can include selling my 'brand' as opposed to his own brick building.
Can you advice me on whether he could persue me for a further years rent and what can I do to ensure that doesnt happen. I would be grateful for any help.
Thank you. Julie
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 ask if you have exclusive occupation of the premises please?

Joshua :

From what you say no lease is actually being negotiated but the landlod simply relied on a licence as a basis for your occupation. Is that correct?

Customer:

Hello.

Customer:

Yes, it is a small single story freestanding building. I run a little bakery from it. When I first rented it, it was a completely blank canvas and in poor repair. The landlord agreed to rent it to me with a Licence for Occupation document. The agreement detai I could have it for 3 years with a £1000 increase per year. I have currently had it for 2 years and my business is unable to sustain the current rent or indeed an imminent increase.

Customer:

my website is www.storminacupcake.com and that shows the front of the building.

Joshua :

Thank you. From what you say you do not share occupation of the premises. Is that correct?

Customer:

Correct, I do not share it.

Joshua :

Thanks.

Joshua :

From what you say the licence has a term of 3 years. Are there any break provisions allowing early termination of the same?

Customer:

yes. It was from 4th June 2012 - 3rd June 2015. There are no break provisions, just an annual rent increase.

Joshua :

thank you.

Joshua :

Based upon what you say, this is not a licence but a lease regardless of what the agreement calls itself by virtue of the decision in Street v Mountfort. this decided where the tenant has exclusive occupation of the premises for a term where he pays rent, this would be a tenancy or lease rather than a licence. For a licence to be a licence, and occupier cannot have exclusive occupation of the premises

Joshua :

However, as you wish to leave, this is to some extent an academic distinction. The difficulty you will have is that you have agreed to a fixed minimum term and whether this is a licence or lease, an attempt to end the tenancy early would amount to a breach of contract

Joshua :

it is possible on the basis that the arrangement appears to be a lease rather than a licence to assign the lease to a third party unless there is an absolute prohibition on assigning under the terms of your agreement.

Customer:

ok. The landlord appears to have accepted my Notice by immediately putting the property on the market for sale. My problem is that he now would appear to want me to leave all of my 'decoration' on the front of the property to aid with his sale.. But obviously i don't want to do that as it is giving the impression that my 'Brand' is for sale. I suppose my question is that, given he has immediately put the property for sale, he is accepting my notice and therefore cannot expect me to pay any further rent, even if he fails to sell it at his choosen property auction. Do you think that is reasonable?

Joshua :

You will continue to own any fixtures attached to the premises for the purposes of your trade or business providing they are capable of physical removal without causing substantial damage to the premises providing the fixture does not lose its essential purpose or utility as a result of the removal. You can remove such fixtures during the term but not after it has come to an end.

Joshua :

in the assumption you are able to remove the fascia board some signs without causing substantial damage to the premises then they will continue to belong to you and you are entitled to remove the same should you wish

Joshua :

Is there anything above I can clarify for you?

Customer:

Can I just ask you quickly. If he decided to be unreasonable, would any court take into account the improvements (electrics, plumbing, decoration) that I have made to the property, therfore leaving it in a far better state than I found it in?

Joshua :

Was anything agreed regarding improvements you have made at the start of the tenancy between you and the landlord and if so could you evidence that agreement?

Joshua :

Is the landlord responsible for maintenance of the premises or are you during your tenancy?

Customer:

There was no agreement, but he was aware of everything I was doing. there doesnt appear to be any specific note about the mainenance apart from 'keeping in good decorative order'. He has not carried out any maintenance, but in fairness, I haven't asked him to.

Joshua :

Were the improvements you made necessary - i.e. were the previous conditions dangerous or old or did you simply want to upgrade?

Customer:

The improvements were made because the interior of the building was extremely poor. A new toilet was fitted (the old one was in very poor condition). New flooring was put down because the original one was so old. The electrics were redone so that I could run my business. so, I suppose it is half and half... however, I think my mistake is thinking that goodwill would play a part. I did hope that it would be taken into account as a good gesture.

Joshua :

Thank you. unless the license provides that you are responsible, the landlord is responsible for maintenance of the premises and is therefore liable to repair any structures all features which are no longer fit for purpose. If you have some pictures and to upgrade certain items which were still usable but not in a condition you are satisfied with, then your improvements would subject has above benefit the landlord when you leave and you would not have a basis to claim monies back for such improvements. If however you can show that the original items you improve when not fit for purpose, then this would fall to the landlord to repair or replace with therefore in these circumstances be a basis for claiming any monies he recently spent on doing so yourself though it would be for you to evidence that the original was not fit for purpose

Joshua :

Is there anything else I can help you with?

Customer:

Ok, that's fine.

Customer:

Thank you very much for your help

Joshua :

If I can assist any further as the situation develops please do no hesitate to let me know.

Joshua :

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.

Customer:

Thank you very much.

Joshua :

Best wishes

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