The costs of commercial leases: is it up for negotiation?

The costs of commercial leases: is it up for negotiation?
The Tenant Fees Bill has shaken up the residential property market but the position is different in the world of commercial property.  So, who should pay the costs incurred in granting a lease? Residential tenants were liable for many fees until very recently and the answer used to also be the commercial tenant but customs have already changed...
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180 Hits

Commercial Property, Frustration and Brexit

Commercial Property, Frustration and Brexit
The UK's return of a vote in favour of leave in the referendum on its future relationship with the European Union had an impact on the latter's decision as to where its European Medicines Agency should be based and, having entered into a lease for a property based in the United Kingdom some 21 months prior to the result, wished for it to be re...
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  287 Hits
287 Hits

Forfeiture of a Commercial Lease – Is It Right For Me?

Forfeiture of a Commercial Lease – Is It Right For Me?
If a tenant breaches the conditions of a commercial lease the landlord is entitled to take legal action against the tenant if the lease permits. Forfeiture is the ultimate remedy available – but which way? Peaceable re-entry or Court proceeding? ​Forfeiture meaning - What is forfeiture of a lease? Forfeiture is essentially the legal remedy whe...
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1316 Hits

What can You do if your Commercial Tenant wants to Leave?

What can You do if your Commercial Tenant wants to Leave?
​ Your tenant approaches you with the news that they have found a new tenant for your property and that they wish to vacate – quickly. Their business is not going as well as anticipated and they express concerns about being able to continue to pay rent. The prospective tenant is keen to move in and your tenant obviously keen to move on, with one ey...
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344 Hits

Entire Agreement Clauses and Misrepresentation

Entire Agreement Clauses and Misrepresentation
On 20 March 2017, Michael Brindle QC gave a judgement in the High Court Chancery Division in the case First Tower Trustees Ltd and another v CDS ( Superstores International ) Ltd concerning entire agreement clauses, common in both commercial property contracts and commercial leases. It related to a failure by the landlord to update tenant on the po...
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311 Hits

The Importance of Lease Registration

Commercial-Lease-1
Another recent high court decision regarding effective service of a break notice highlights the importance of registration following the lawful assignment of a commercial lease.

In Sackville UK Property v Robertson Taylor Insurance Brokers Limited and Integro Insurance Brokers Limited [2018] EWHC 122 (Ch), the landlord rejected service of a break notice by the new tenant on the ground that the notice was invalid, as it had been served by a party who was merely a beneficial owner and not the tenant at the time the notice was served. 

On an assignment of a commercial lease, the existing tenant is generally required to obtain the consent of the landlord to assign (‘transfer’) the remainder of the term of the lease to a new party, known as the assignee. When a registered leasehold title is assigned, a transfer deed is executed by the parties and sent to land registry to enable the assignee to be registered as proprietor of the leasehold title following assignment.

On the facts of this case, the landlord had granted consent to the assignment of the lease. However, the assignee failed to register a change in the ownership of the leasehold title at Land Registry on the mistaken belief that the assignment was sufficient to transfer the remainder of the lease. By failing to register the transfer of the registered legal title, the assignment took effect in equity only and the legal estate did not vest in the assignee. 

The new tenant purported to serve a break notice in accordance with the terms of the lease.  It is always advisable to obtain legal advice when serving a break notice, as this is one of the most litigated clauses in commercial leases. 

In this case, the landlord rejected the notice as invalid because the tenant had failed to register themselves as legal proprietor, and the high court agreed with the landlord; a disposition of a registered estate does not operate at law until the disposition is completed by registration.

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327 Hits

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