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Thomas, Solicitor
Category: Property Law
Satisfied Customers: 7676
Experience:  UK solicitor holding an England and Wales practising Certificate.
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A question about a commercial lease agreement and security

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A question about a commercial lease agreement and security of tenure - My wife and I own a small commercial property. A company I half own leases the first floor of the building. A separate company wants to lease the ground floor of the building. If we give this separate company security of tenure can we easily, and without any legal consequences A)End their lease and rent the building as a whole to someone else B)End their lease if our business wants to expand into the ground floor C)Sell the building as a whole without any continuing leases?
Hi Thank you for your question and patience, I’m Tom and I’ll try to help you.Basically, if you want to retain complete unfettered control of the property then you should NOT grant a lease giving security of tenure to the tenant proposed to take a lease of the ground floor.This is because if they are given security of tenure in their lease then they will have a statutory right to apply to court for a renewal of their lease. You could only possibly object on the grounds outlined on the following site: for objection to the renewal of a leaseSee “Grounds for objection to the renewal of a lease” halfway down the page.In order to gain possession you would have to serve notices in the correct way and then litigate if the tenant resist the refusal of a grant of a new lease. This means time, money, uncertainty and potentially compensation paid by you to the tenant.For this reason you should exclude the relevant sections of the Landlord and Tenancy Act 1954 from the lease. Additionally9, you should instruct a solicitor to draft the lease and arrange the service of the notice and execution of the necessary declaration by the tenant in order to achieve this. My goal is to provide you with a good service. If you feel you have received anything less, please reply back as I am happy to address follow-up issues specifically relating to your question. Kind regards,Tom
Customer: replied 2 years ago.
Hi Tom, Thanks for this. We will definitely get them to opt out of the security of tenure. They want to sign tomorrow (Friday), with the effective tenancy start date set to 4th March. I know I need to give them 14 days prior notice to opt out of security of tenure. Will the opt out be valid if they sign the opt out and lease at the same time tomorrow? Or do I need to give them 14 days notice before they sign anything at all? Kind regards, Adrian.
Adrian, You should not proceed without getting a solicitor to check the lease excludes the security of tenure provisions AND drafted the Notice/Declaration for you AND checked the tenant has executed the lease. If you make a mistake in the drafting of the lease, or notice or in the execution of the notice then the security of tenure provisions will apply and you will put yourself in a horrible mess. Even if the lease were draft correctly and you had the correctly notice then if the tenant signed the declaration tomorrow without 14 days expiring then the security of tenure provision would apply. I'm sure you want the complete the lease asap and get rent but - I cannot make this point strongly enough - do not complete the lease OR the notice declaration without having a solicitor check it in person. I cannot do that because this is a general question/answer service. Please do remember to leave feedback.
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