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Ash
Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I purchased a property in 2004 and rented this out to a Tenant

Resolved Question:

I purchased a property in 2004 and rented this out to a Tenant ("T") under an Institutional Full Repairing and Insuring Lease. T is engaged in the business of providing childcare facilities to local authorities. T has now been acquired by a Private Equity ("PE") Firm.
PE would now like to acquire the property from me sustainably reasons. Unfortunately, PE and I have just discovered that in 2004, T entered into an agreement with its property agents to pay them on-going agency fees on the property as long as T uses the property-on an indefinite basis. This arrangement continues even if PE acquires the property from me or from someone else. This arrangement was not know to me and has only just been brought to my attention.
The arrangement is preventing PE from acquiring the property and if they are not able to acquire the property, this would be a considerable hindrance to their business, and to myself as well.
My question is: do I have a right of action against the former directors or the Agents of T, notifying me of such a material arrangement, and that such an encumbrance had been placed on my property-I am not able to fully exercise jurisdiction on my property.
Submitted: 2 years ago.
Category: Property Law
Expert:  Ash replied 2 years ago.
Alex Watts :

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

Alex Watts :

Was it a condition of the lease that you were informed of such material decisions please?

Customer:

no-was not aware of these dicsussions

Customer:

........and in my view, by having this encumbrance place on the property at the start of the lease, it devalued the property at the start of the lease.

Alex Watts :

Ok, I am not sure of the link between T and an agency?

Alex Watts :

What is the fee between them how does it relate to the property?

Customer:

the fee is based on a percentage of teh property value......., say 3.5% pa. this is "rendeded". PE acquired T over 2 years ago and have never met teh agent, and are wondering why these payments are being made.however,

Customer:

T (ie the main diirector of T) and agency, other than being good buddies, apparently are unconnected

Customer:

so if the property was worth £500k, then agent would be paid £17.5k per year, indefinitely-as long as the property continues to be used-even if PE brought it themselves and cancels the existing lease with T (which is now a subsidiary company of course).

Customer:

ok popping out 40 mins

Customer:

any news?

Alex Watts :

Sorry I was in Court. So there is a contract between T and this agent, what do they actually do?

Customer:

no problem

Customer:

the agent was suppose to introduce property investors

Customer:

any news?

Alex Watts :

But what has the agreement T signed got to do with you?

Alex Watts :

I dont see how you can be held against a contract signed by someone else?

Customer:

the agreement effectively place an encumbrance on my property without my knowledge-i am not able to dispose of it as i see fit

Alex Watts :

Is there any restriction at the Land Registry?

Customer:

no

Alex Watts :

Ok, then I cant see why you can't dispose of the property.

Alex Watts :

There is nothing at the Land Registry, there is no contract between you and the agent, therefore you can't be bound

Alex Watts :

This is a contractual dispute between T and the agent.

Alex Watts :

Its nothing to do with you.

Alex Watts :

PE need to sort it out with the agent. There is simply no contract between the agent and you.

Alex Watts :

Can I clarify anything about this today please?

Customer:

ok that about clarifies it then. thanks

Alex Watts :

Can I help with anything else today?

Customer:

ok thanks

Alex Watts :

If this answers your question can I ask you to rate my answer before you go today, the button should be at the bottom of the screen

Alex Watts :

If you need more help please click reply

Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
Ash and other Property Law Specialists are ready to help you
Expert:  Ash replied 2 years ago.
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