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leanne-jones, Barrister
Category: Law
Satisfied Customers: 183
Experience:  Barrister
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We are a business in Northern Ireland renting out commercial

Customer Question

We are a business in Northern Ireland renting out commercial Property. We have receiveded notification that one of our tenants is entering into a CVA. He has signed a lease for 10 years and there is 3.5 years remaining on the lease. We have been asked to submit the amount he owes us - can we claim for the rent that is going to be lost for the next number of years under the lease as well as the rent that is outstanding at this time.
and if we can does it mean that he will have to contribute more money each month into the cva agreement or is what he has agreed at present 20p in the £ reduced to each creditor. If we claim for loss of future rent does it mean we cannot lease the unit to another business until the end of the 10 year period (the original lease) (he has already cleared his stock out of the premises
Submitted: 4 years ago.
Category: Law
Expert:  leanne-jones replied 4 years ago.
Hello - my name is Leanne and it will be my pleasure to assist you today.

Is there a personal guarantee at all?
Customer: replied 4 years ago.

No - no personal guarantee from tenant


Expert:  leanne-jones replied 4 years ago.
Assuming the the lease is going to be terminated then you can claim all arrears and the remaining period of rent.

However if the tenant is going to stay you can only claim arrears on the property.

Therefore as of the date of CVA if the tenant is going to stay, you will get arrears included and get say 20p in the £.

But future rent will be at full rent.

But it depends if the lease is terminated and they are still trading from the unit.

Ideally you could have sought a personal guarantee which meant that in the event of default the owners are personally liable.

I hope this helps you.

Customer: replied 4 years ago.

The tenant has vacated the premises but has not offically given written notice&nbsp;of termination or returned the keys.&nbsp; He has verbally stated that he will not longer require the premises.&nbsp; If we are going to have something signed stating that he is terminating should we do this before or after the date of the creditors meeting.&nbsp; Regarding the point in my original question can you clarify if his debts amount to £570,733 (which includes £29,867 amount of rent outstanding - figure submitted by him) and we&nbsp;submit our claim (incl future rent due according to the lease agreement)which would then increase to approx £90,000 who does this affect the proposal for the cva - will all creditor receive less</p><p>in the £ or does he have to contirubute more.&nbsp; Must he declare a dividend of 20p in the £.&nbsp; (the total debt includes £319,000 owed to a shareholder who will not receive a dividend)</

Expert:  leanne-jones replied 4 years ago.
Yes you need some form of notice to say he has given up the agreement. You can include a cost for future rent, but this element may be excluded by the Insolvency Practioner as you could advertise and rent the property out again. Clearly if you were able to do this you would only be able to claim rent for the vacant period.

So get the costs together for re-letting and submit the claim. But be aware that you may have this part of the claim excluded. You couldnt claim future rent and then be able to rent it out - it is double claiming.

But include everything. Arrears there is no problem with. The CVA must be approved by 75% of the voting creditors. You can reject the claim and they would have to come back to you. Leanne

Expert:  leanne-jones replied 4 years ago.
I'm just following up with you to see how everything is going. Did my answer help?