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Hello my name is ***** ***** I will help you with this.
What is the exact clause the company is relying on please?
'THE LANDLORD [i.e. me] AGREES WITH [company name] THAT HE / SHE WILL NOT ENTER INTO [sic] TENANCY AGREEMENT SUBSEQUENT TO THIS ONE DIRECTLY OR INDIRECTLY WITH THE OCCUPYING TENANTS. ANY BREACH OF CONTRACT BY THE LANDLORD WILL MAKE THE LANDLORD RESPONSIBLE FOR ALL COURT AND LEGAL COSTS OF [company name]'
The exact clause is as I quoted in my question, ie
But the people who you have contracted with now were occupying the property before?
And the Ltd company business is always to sublet, they never occupy themselves?
Are you able to respond?
It is bad news I am afraid. You knew this limited company was in the business of renting out properties and never occupied it themselves.
The clause is 'THE LANDLORD [i.e. me] AGREES WITH [company name] THAT HE / SHE WILL NOT ENTER INTO [sic] TENANCY AGREEMENT SUBSEQUENT TO THIS ONE DIRECTLY OR INDIRECTLY WITH THE OCCUPYING TENANTS.'
This states occupying tenants.
Your main tenant (the company) never occupied the property. It was the sub tenants.
The wording could have been better and maybe read sub tenants to occupy but it does not
If the matter went to Court a Judge would look at the contract and see what its meaning is
On the basis you knew that the Company did not occupy and that the company rented out the property, a Judge is likely to consider that occupying tenants meant the sub tenants and you knew this.
If that is the case then sadly you would be in breach of contract and liable.
I agree the wording is not as clear as it could be, but on the above basis I am sadly of the view that you would be liable.
The agreement did not prevent you from terminating the contract, which is correct. But it also says you can't make a subsequent agreement with the occupying tenants.
I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest
Can I clarify anything for you about this today please?
But I have NOT entered into an agreement with the occupying tenant!!!!!!
Of course the sub-tenant who became my direct tenant was the 'occupying tenant'.
The point is - I have not entered into an agreement with her.
She became my tenant automatically.
So there is no agreement between you and the tenant? Are you accepting rent?
If so, then the tenant is your tenant and you have an agreement.
It does not have to be written
It can be by conduct.
If the tenant is paying you rent direct then you have breached the agreement.
I am sorry.
She may have become your tenant automatically because you terminated the agreement with the main tenant.
But as soon as you do that and the sub tenant becomes your main tenant that clause kicks in
I am sorry but I think if it went to Court you are likely to lose.
Does that clarify the position?
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There can be two tenancies for the same property. One with you and one with the tenant Landlord.
If you are being paid and not the Landlord then in theory the Landlord can apply for possession.
No doubt if this was the case the tenant would say they are paying you.
Then a Judge would have to decide and make a finding who the tenant was paying and who the tenancy lay with
If it was with you then you would be in breach. If it was with your tenant (the company) then you would not be in breach
Clearly there is a great deal at risk here and if you lose you would be liable for the costs of your tenant (the company)
Does that clarify?