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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11129
Experience:  30 years as a practising solicitor.
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I am looking to acquire a petrol filling station on a leasehold

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Hi, I am looking to acquire a petrol filling station on a leasehold basis. This is in Scotland. In addition to the standard clauses within a commercial lease, I would like the lease to be for 20 years but with an additional clause with option to buy the premises at 5 years, 10 years and 15 years.
Secondly, for my protection, I would want a clause included to ensure that the landlord could not terminate the lease early if I make a success of the business and take it over himself.
Finally, if and when I did purchase the premises, I would like a clause included to stipulate that the purchase price would be for the land, premises, fixtures and fittings only, and not the goodwill of the business, which I would have built up and would belong to me.
Can you help?
Submitted: 1 year ago.
Category: Law
Expert:  JGM replied 1 year ago.
Thank you for your question. I am a solicitor in Scotland.
An option to purchase is normally included in the missives which precede the grant of the lease. You would have to provide in the missives that the missives would subsist for the duration of the lease unless and until you exercise the option to purchase.
Secondly if you enter into a 20 year lease there would be no standard provision allowing the landlord to take back the premises early unless the tenant breached the lease.
Thirdly, the clause relating to the option to purchase should specify clearly that the subjects of purchase would be valued on a bricks and mortar basis only without reference to the value of the goodwill of the business.
The preliminary heads of terms made up by the surveyor or agent should make these points clear for the guidance of your solicitor and that of the landlord.
Happy to discuss further.
Please leave a positive response so that I am credited for my time.
JGM and 2 other Law Specialists are ready to help you
Customer: replied 1 year ago.
Thank you for your answers, most of that makes sense. You talk about the missives which precede the grant of the lease. Is this something on which I would have to instruct a Solicitor? Also, the preliminary heads of terms isn't a term which is known to me. Is it the case that I engage a Surveyor who effectively lays the groundwork for the lease, then it gets handed on to the Solicitor? I'm assuming a generic lease from the internet where I fill in the blanks prior to having it examined by my Solicitor isn't an option?
Customer: replied 1 year ago.
Thank you for your answers, most of that makes sense. You talk about the missives which precede the grant of the lease. Is this something on which I would have to instruct a Solicitor? Also, the preliminary heads of terms isn't a term which is known to me. Is it the case that I engage a Surveyor who effectively lays the groundwork for the lease, then it gets handed on to the Solicitor? I'm assuming a generic lease from the internet where I fill in the blanks prior to having it examined by my Solicitor isn't an option?
Expert:  JGM replied 1 year ago.
In commercial lease terms, missives would comprise a formal offer to lease issued by the landlord's solicitor, in draft, adjusted between him and your own solicitor. Part of that would be a draft lease again which would be adjusted between the solicitors.
The current practice is that the main terms of the lease to be entered into would be embodied in Heads of Terms. This is a preliminary step and usually prepared by whoever has negotiate the deal between landlord and proposed tenant. Typically this would be the selling agent who is sometimes a surveyor.
That is a different surveyor from the one that you should be instructing to inspect the subjects and report to you about the current condition of the subjects and the correct rent value etc. Anyone embarking on a long lease should take the same protective steps as if they were the owner of the property. You may also want to have a schedule of condition drawn up detailing the current condition of the property so that the lease reflects that you would never have to bring the property into "perfect" condition at the conclusion or any point at which the landlord considers a schedule of dilapidations to be appropriate. Don't forget that a standard full repairing and insuring lease has very onerous conditions as regards ***** ***** The tenant could be found liable for a full refurbishment of the building even if the place was a dump when it was taken on. A properly revised lease will protect a tenant from that type of scenario.
So going on from that it would be complete madness to take a generic lease from the Internet and try to use it. Solicitors are there to prepare such documentation and protect you from the dangers of the landlord taking control of the paperwork and taking advantage of you. And your solicitor is there to protect you from yourself. It may cost you several thousand pounds. It will be money well spent. You are embarking on an important and hopefully lucrative commercial venture. Don't try to cut corners at the start with the most important asset apart from yourself. A rock solid lease and contract is crucial. Also remember that Scots law legal documentation is not so prevalent on the Internet. You would in all likelihood end up with some junk from England or even the US and it would be unusable.
Sorry to be so frank with you but I spend much of my professional life trying to extricate people from home made contracts and I don't want you to suffer the same fate.
I hope that helps. Please leave a positive rating so that I am credited for my time.
Customer: replied 1 year ago.
Thank you very much