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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I have a business tenancy agreement that was set up in 2001.

Resolved Question:

I have a business tenancy agreement that was set up in 2001. The agreement was with a landlord that went bust but was taken over by another landlord in 2010. In 2007 the business was changed from a partnership to a LTD company but the new landlord kept the old agreement from 2001 and never gave us a new contract.
Question. As the old contract is not in the new landlords name and our new company name, does this mean if we decide to close the business that we are personally liable under the old contract (partnership in my own name) or in fact the landlord should of issued another contract under our ltd company name which he was never made aware off.
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

Just to be clear when you say the business went from partnership to Ltd company, I assume you mean you as tenants please?

Customer:

Our company was set up as a partnership, the other partner left in 2004, in 2007 we set up a LTD company, the tenancy agreement was never changed in to the LTD company name and a new contract in 2007 was never produced to reflect the ltd company name.

Alex Watts :

Did the old agreement say it could be assigned either by the landlord or tenant?

Customer:

I dont understand the question, what i am trying to find out is whether we are still liable to pay the current landlord the remaining monthly cost of £3k per month if the business gets wound up by HMRC on the 3/11/14. The old landlord sold the building to a new landlord but no contract wording or in fact the names on the agreement were ever changed

Customer:

the current agreement is set to run until 23/09/2016, we are trying to find out if we are still personably liable to pay the £3k per moth until that date

Alex Watts :

Yes I know that.

Alex Watts :

What I am saying is did the original tenancy say it could be assigned?

Customer:

to a limited company?

Alex Watts :

I am asking does the original tenancy agreement say anywhere in it that it can be assigned?

Customer:

not that i am aware of, i dont have it in front of me but it does not state anything either way, i know the previous landlord and certainly the current one do not like LTD companies as tenants

Alex Watts :

Ok - in that case the old agreement ended when the old Landlord went bust

Alex Watts :

This means that the agreement ended

Alex Watts :

What you have is a tenancy at will that means it can be ended by either party

Alex Watts :

So unless you signed a new agreement with the new Landlord you wont be personally liable

Alex Watts :

Your liability ended when the old landlord went bust

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

ok, so as no new agreement was in place with the new landlord and no new contract was signed then in fact twe can walk away

Alex Watts :

Yes

Alex Watts :

You have a tenancy at will

Customer:

i have established from my dad that the landlord did not go bust but sold the business, no new contract was ever written, is the above still the same, i will send over the wording shortly in some of the points listed in the contract

Alex Watts :

Indeed.

Alex Watts :

Can I clarify anything else for you?

Customer:

I think that is it, but i just want to clarify the point in the contract that is a concern, i am waiting for my dad to get home in the next 30 mins so i can relay the point in question.

Customer:

or would anything in the contract be superceded as a new contract was never made between my dads company and the new landlord?

Customer:

As my dads company is being wound up on 3/11/14, are we liable to pay any existing rent?

Customer:

or any arrears?

Alex Watts :

No

Alex Watts :

The old company has nothing to do with the new company

Alex Watts :

Does that clarify?

Customer:

ok, so to be clear, whatever is written in the old contract is not worthless as a new contract between our company and the new landlord was never compiled and put in writing in 2010. This means we can now walk away from the tenancy without paying the current rent at the end of october and any arrears when the business is closed by HMRC

Customer:

i meant to say now worthless

Alex Watts :

Yes, old contract gone.

Alex Watts :

Forget that

Alex Watts :

There is no new contract with the new Ltd Co

Alex Watts :

Therefore not liable for historic arrears

Alex Watts :

And you are not personally liable

Alex Watts :

Does that help?

Customer:

The cluase , section 2 interpretation

Customer:

2.1 the expression "landlord" "tenant" include the respective successors in title, 2.2 where two or more persons are standing as sureties or are the landlord or the tenant for the time being covernance by them are joint and several. 2.4 titles or headings appearing in this lease are for reference only and should not effect its construction.

Customer:

this is what is in the contract, dopes this change anything?

Alex Watts :

But the old contract went, so it makes no difference

Alex Watts :

Does that clarify for you?

Customer:

Thats is great news, that was all the clarification i needed. I just wanted to make sure for any reason the wording written in that contract was legally binding.

Alex Watts :

Is there anything else I can clarify for you?

Customer:

Thank you Alex, your help was really appreciated

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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