If you are considering a lease of commercial property, one of the conditions that is often imposed by a landlord is a request to "opt out" of the protection given under Part 2 of the Landlord and Tenant Act 1954. When this Act was first passed it was not possible for your landlord to ask you to opt out, but following a change in the law this was amended to allow an opt out but only with the permission of the Court.
Now, however, further changes have been made to the law with the result that the only alert you may receive to the fact that your landlord is removing the protection is a "health warning" contained in the formal notice your landlord serves on you. Opting out of Part 2 protection has massive significance for tenants and is a hugely important step. It is therefore one you should only agree to with full knowledge of the protection that you are signing away.
Under Part 2 you are given "security of tenure" of your commercial lease. Put simply, if you have a five year lease then when it ends your landlord must grant you a new lease on similar terms. You can then continue your business in the same location. There are provisions that will allow your landlord to remove you, including breaches of the lease, non-payment of rent or your landlord needing to redevelop the premises. Unless your landlord is able to prove these circumstances exist, however, your security of tenure is assured.
By signing an opt out of Part 2 when you take on the lease, you give away this security. The result of this is that when your lease ends, your landlord is perfectly entitled to ask you to leave the premises. If your business has been built on being in a specific location then moving will be financially detrimental to you. Alternatively your landlord could instead insist you pay a much higher rent for the grant of a new lease, knowing that if you do not you will lose out financially. The opt out gives your landlord the upper hand when negotiations for a new lease take place.
So as can be seen you should never agree to opt out of Part 2 protection lightly and certainly not without fully understanding its effect. At the very least you should not 'give away' this protection, and it is always worth negotiating a more favourable lease or rental if your landlord insists that he or she will not give you Part 2 protection.
Are you are looking for expert commercial property solicitors in hull? Talk to Myer Wolff Solicitors In Hull. Ashley Easterbrook is a partner in the firm's private client department.
No comments:
Post a Comment