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COVID 19: Guidance and Support Hub
COVID 19: Guidance and Support Hub
Problems &
Disagreements
Problems & Disagreements
Starting a business is an empowering yet daunting time. The start-up costs are generally high and the returns in the first few months are low or non-existent.
Here you will find advice on some of the key areas of concern when encountering a problem or disagreement.
Take control.
Get your money back fast.
Preparation is key.
Top tips for managing employee disputes.
Get it right first time!
Empower your team.
Understanding your rights and responsibilities.
What are the options?
Manage your debt
Mediation
What is it?
Mediation is a process in which the parties discuss their dispute(s) with the assistance of a trained impartial third party (called the “mediator”) who assists them in resolving their disputes and reach a settlement.
Why is it important?
In small claims cases in the County Court the parties are usually asked whether they would like to use the Court’s free small claims mediation service. If the parties agree the straightforward cases are referred to trained county court staff who conduct a one-hour mediation by telephone without any cost to the parties.
Where the claim is complex the court refers the claim to the National Mediation helpline. The case is allocated to a Civil Mediation Council approved mediator who conducts the mediation for a small fee subject to the parties agreeing to be jointly responsible for the fee. About 95% of all mediations take place by telephone with a high success rate.
Risks
If mediation does not work you still have the option of court proceedings. However, it makes sense to consider mediation before you litigate. Litigation can be very expensive as there is no such thing as a cast iron case. Even if your lawyers and you are convinced that you have a very strong case a judge may not think so and you may end up paying your costs in addition to the other side’s legal costs.
For example, a claim of £6,000 will set you back £455 in fees if you issue proceedings by post or £410 if you issue your claim online. If your claim is over £10,000 you are looking at a fee of 5% of the claim up to £200,000 and £10,000 after that.
If you are instructing a lawyer, he will handle the paperwork for you and will charge a fee dependent on the size of the claim and the complexities of the matter. Representing yourself costs less but that can be a false economy when dealing with the complexities of the court system. Mediation could assist you in resolving a dispute with your debtor without having to spend money on legal proceedings.
Pure Business Law are experienced debt recovery solicitors. We provide debt recover help and advice to businesses and consumers seeking to recover debts. Call us today!
Letter accepting payments in instalments
What is it?
A letter accepting payment in instalments is a letter that accepts debt repayments from a debtor in instalments.
Why is it important?
It sets out the amount owed, as well as the dates of each payment (i.e. frequency of instalments) , the amount to be paid on each payment date (i.e. the instalment amount) , the payment method and the date the debt has to be repaid.
Risks
This letter prevents any potential legal disputes by setting out the agreement between the debtor and creditor in relation to the payment of the debt.
Letter proposing payments in instalments
What is it?
This is a letter by the debtor offering to pay off an outstanding debt by making regular fixed payments over a specific period of time. This letter is only an offer and does not constitute a legal agreement. If the creditor accepts the offer via a letter accepting payment in instalments, then that agreement will be a valid and binding agreement.
Why is it important?
This letter assists a debtor as it shows a willingness to pay off a debt and can stop a creditor from taking further action against a debtor.
Risks
If you are a business, a letter proposing payment in instalments can help your business cashflow as the business will have the certainty of receiving a specific amount of cash each month until the debt is repaid.
Our debt collection solicitors can provide you with professionally drafted instalment proposal payment and instalment payment acceptance letters at cost-effective fixed fees. Call us now!
Recover debt - Debt Management
What is it?
Cashflow is key to your business success. Keeping on top of your business debts is crucial to achieving a steady cashflow. Court action should always be a last resort due to the time and cost.
Why is it important?
Identifying a bad debt early improves the chances of recovering the debt. You have to look for signs in the customer’s behaviour that point to impending default.
If you start noticing that some of the customers who owe your business money are ignoring your emails and phone calls and are difficult to contact, are breaking their promises to pay the debt with frivolous excuses, are reluctant to agree payment schedules, have changed their contact telephone number and or address without telling you, start making excuses about business being bad or complains about contracts or the services that you provide (when you know that the services are good) you will have to act to recover the debt.
It is best to try to recover the debt yourself without seeking external help first. This would assist you in keeping open the communication channels with the customer and in retaining the customer. Keep all records of your attempts to contact the customer.
When you have exhausted all the usual methods of trying to recover a business debt such as payment reminders, phone calls, emails, debt mediation service, you may wish to write a Letter Before Action (LBA) and then issue debt recovery proceedings yourself in the County Court; issue a Statutory demand, apply for a charging order to be placed on the creditor’s assets eg buildings or land or issue a Winding -up Petition.
If all your in-house attempts to recover the debt fail, then may be time to consider the services of our debt collection lawyers or a debt collection agency.
Call us now to discuss your requirements with one of our debt collection lawyers!
Managing licenses
Running an online business
Protecting your IP
Business Relationships
Writing a business plan
Recovering a debt
Rent commercial property - Commercial notices
What is it?
The Landlord and Tenant Act 1954 (as amended)governs the rights and obligation of landlords and tenants of premises which are occupied for business purposes.
Why is it important?
The commercial lease notices are the forms used to end or renew a commercial tenancy. Assuming that the parties have not contracted out of the Landlord and Tenant Act 1954, each party will need to use a specific form. Landlords must use a Section 25 form while tenants must use a Section 26 form. The Section 25 Notice is a form that can be used by a landlord to either:
- end a tenancy with a proposal to start a new tenancy; or
- end a tenancy with reasons for refusing a new tenancy.
The Section 26 Notice is a form that can be used by a tenant to request a new tenancy.
There are strict time limits for serving a Section 25 or 26 notice.
Risks
If the landlord or tenant does not adhere to the time limits, they may end up losing their right to terminate the tenancy or request a new tenancy. It is therefore vital that as a commercial landlord or business tenant you clearly understand the law relating to service of commercial notices.
Please contact our commercial property solicitors if you require advice on your business tenancy or if you are a landlord. Our commercial solicitors are waiting for your call. Tel ; 01234 938098.
Commercial Landlord & Tenant problems
What is it?
Disputes can seriously affect your business as a tenant, and your investment as a landlord. When disputes arise in commercial leases they need to be addressed quickly and tactically to minimise disruption and loss.
Why is it important?
Our specialist property dispute solicitors advise commercial landlords and tenants on a wide range of issues including:
- Break notices
- Disputes concerning requests for landlord’s consent
- Property injunctions
- Forfeiture of commercial leases and applications for relief from forfeiture
- Early termination of a commercial lease
- Contested and uncontested business lease renewals
- Commercial lease agreement interpretation
- Rent reviews
- Breach of covenant
- Repair and dilapidation claims
- Rent and service charge recovery
Risks
Our property disputes solicitors have some top tips for landlords to avoid problems.
Landlords:
1.Do a background check on all your tenants
2.Take a rent deposit
3.Get a guarantor if you have doubts about the prospective tenant’s creditworthiness.
4. Do an inventory before the tenant moves in
5. Ensure you have a break clause, rent review, early termination clause, dilapidations clause, landlord’s consent clause, forfeiture clause and other relevant clauses in the lease agreement
5. Insert an exclusion of security tenure in the lease at the time of grant of the lease
If you are a commercial landlord and would like some advice on dealing with a commercial landlord and tenant problem or dispute, then do call us on 01234 938089 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
If you are a commercial tenant and would like some advice on dealing with a commercial landlord and tenant problem, call us on 01234 938090 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
Rent arrears
What is it?
One of the most important issues you face as a landlord is ensuring that your commercial tenant pays rent on time. If your tenant fails to pay the rent and other sums due under a lease, there are several remedies you have which will enable you get the breach remedied and recover payment but you need to decide the best course of action taking into account your circumstances, your commercial tenant’s circumstances, current market conditions and any future plans you may have for the property. Depending on your long-term objectives, you will need to consider the action to take and how to protect your position.
Your options are (1) negotiating payment in instalments (2) forfeiture (3) drawing down on the rent deposit if there is a provision to that effect in the rent deposit deed (4) pursue a guarantor (4) pursue a former tenant under an Authorised Guarantee Agreement (AGA); (5) serve a Statutory demand followed by insolvency and winding-up (6) use the Commercial Rent Arrears recovery (CRAR) procedure – this involves instructing an enforcement agent to take control of a tenant's goods and sell them on to recover the debt. This procedure is complex -various notices need to be served on the tenant throughout the process. Certain conditions also need to be satisfied before you can use CRAR and (6) Issue Court proceedings.
If you are a landlord and your commercial tenant has failed to pay its rent, why not speak with one of our specialist commercial property solicitors on 01234 938089.
Dilapidations
What is it?
Dilapidations is a term used when referring to the condition of a commercial property during the term of the tenancy or when the lease ends. It means the same as disrepair and is linked to the commercial tenant’s repairing and decoration obligations in the lease agreement.
Why is it important?
Most commercial leases contain a clause that the tenant will be responsible for dilapidations. The landlord may serve a Schedule of Dilapidations on the tenant at different stages of the tenancy:
A schedule served during the fixed term of a lease is known as an interim schedule. It will specify the disrepair alleged by the landlord and the remedial works which the landlord requires the tenant to undertake.
A schedule served within the last three years of the term is a terminal schedule.
A schedule served at or after the end of a lease term is a final schedule of dilapidations
The difference between an interim schedule and a terminal schedule when compared with a final schedule is that whilst the first two may contain the same alleged breaches of covenant and details of remedial work required as an interim or terminal schedule in this case the tenant will not have an option to carry out the works himself since he no longer occupies the property. The landlord’s remedy is to claim damages to cover the cost of remedial works, AND loss of rent, service charges, rates, professional fees and VAT for any period during which the property is off the lettings market. This may have serious financial implications for business tenants.
Risks
Schedules of Dilapidations are often the cause of disputes between landlords and tenants, the result of which may mean court action . Tenants should ensure that they fully understand these implications and take steps at the start to minimise their liabilities before signing the commercial lease.
For instance, when negotiating a new lease, as an alternative to accepting full liability, the tenant may insist that the repairing liability be restricted to leaving the building in no worse condition than at the start of the lease. Further, the word “repair” in a lease sometimes includes a liability to renew, for example, where a roof was so dilapidated that renewal was the only practical option. To limit any repairing liability the tenant should instruct a Building Surveyor to prepare a Schedule of Condition, recording the state of decoration and any pre-existing items of disrepair.
These precautions as also relevant on assignment where a new tenant takes on the obligations of an existing tenant. Alterations and disrepair must also be considered carefully by a tenant considering assignment of another tenant’s lease. Further, as an alternative to accepting full liability if breaches and alterations are identified before the lease purchase, the tenant may be able to negotiate a reverse premium.
If you have a dilapidations dispute and need information and advice, please contact our expert commercial property lawyers.
Service of Section 146 Notices
What is it?
This is a notice under section 146 of the Law of Property Act 1925 (Section 146 Notice) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.
Why is it important?
“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant (other than a covenant to pay rent )has been breached.
For the notice to be valid and binding the notice must specify the breach complained of and if the breach is capable of remedy, require the tenant to remedy it and ask the tenant to pay monetary compensation to the landlord for the breach.
A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.
A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.
Forfeiture of leases (including possession proceedings)
What is it?
A commercial property lease usually continues until its end date unless you include a clause to end it earlier. As a landlord, you can only end a lease when the tenant fails to pay rent or fails to meet other lease obligations.
Forfeiture occurs when a landlord ends the lease due to the tenant breaching the terms of that lease by being in arrears with rent or by significantly breaching any other covenant.
Before taking action and seeking possession of the property, you should seek legal advice. If you are a tenant and want to avoid forfeiture or seek court relief from forfeiture, you should also seek legal advice. We are highly experienced in this area of law, so please contact our commercial property lawyers.
Subject to the terms of the lease agreement (legal advice should be sought) a commercial lease generally cannot be forfeited by any other breach of the lease except non-payment of the agreed rent. If a different breach of lease has occurred, then the landlord should serve the tenant with a Section 146 notice (Nazish – please connect the words “Section 146 notice” to the other places in the website where we have defined a Section 146 notice) which should state exactly what that breach is and must give the tenant a set period of time to rectify the breach.
Forfeiture Requirements:
For the landlord to exercise his right to forfeit the lease and take possession there must be an express clause in the lease that gives the landlord the right to forfeit, the breach should be a fundamental breach such as not paying rent or other form of very serious breach, the landlord must take the appropriate procedural steps (i.e. Section 146 Notice) and the landlord must not waive the right to forfeit.
If the tenant complies with the notice and remedies the breach within the given time the landlord can no longer proceed with forfeiture but if the tenant continues to commit a breach of the lease the landlord can issue proceedings for forfeiture of the lease in the County Court.
For more information on forfeiture of a commercial lease for non-payment of rent or otherwise or Section 146 Notices please feel free to contact our lease forfeiture specialist solicitors.
Service of section 25 notice and issue of proceedings
What is it?
This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954. It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act. The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.
When can the parties apply to the court?
Either party may apply to the court as soon as the tenant has received the Section 25 form from the landlord. However, it is usual practice for the parties to try to reach an agreement before going to court.
If a Section 25 form is served by the landlord, the last day for either party to apply to court is the date the tenancy will expire as set out in the Section 25 form. Whilst the parties can agree to an extension of this deadline, but they must do so in writing before the expiry of the original deadline. They can also agree to further extensions, provided they do so before the current extension runs out. If the tenant fails to apply to the court in time, the tenant loses the right to renew the tenancy.
Landlord & Tenant problems
Rent commercial property - Commercial notices
What is it?
The Landlord and Tenant Act 1954 (as amended)governs the rights and obligation of landlords and tenants of premises which are occupied for business purposes.
Why is it important?
The commercial lease notices are the forms used to end or renew a commercial tenancy. Assuming that the parties have not contracted out of the Landlord and Tenant Act 1954, each party will need to use a specific form. Landlords must use a Section 25 form while tenants must use a Section 26 form. The Section 25 Notice is a form that can be used by a landlord to either:
- end a tenancy with a proposal to start a new tenancy; or
- end a tenancy with reasons for refusing a new tenancy.
The Section 26 Notice is a form that can be used by a tenant to request a new tenancy.
There are strict time limits for serving a Section 25 or 26 notice.
Risks
If the landlord or tenant does not adhere to the time limits, they may end up losing their right to terminate the tenancy or request a new tenancy. It is therefore vital that as a commercial landlord or business tenant you clearly understand the law relating to service of commercial notices.
Please contact our commercial property solicitors if you require advice on your business tenancy or if you are a landlord. Our commercial solicitors are waiting for your call. Tel ; 01234 938098.
Commercial Landlord & Tenant problems
What is it?
Disputes can seriously affect your business as a tenant, and your investment as a landlord. When disputes arise in commercial leases they need to be addressed quickly and tactically to minimise disruption and loss.
Why is it important?
Our specialist property dispute solicitors advise commercial landlords and tenants on a wide range of issues including:
- Break notices
- Disputes concerning requests for landlord’s consent
- Property injunctions
- Forfeiture of commercial leases and applications for relief from forfeiture
- Early termination of a commercial lease
- Contested and uncontested business lease renewals
- Commercial lease agreement interpretation
- Rent reviews
- Breach of covenant
- Repair and dilapidation claims
- Rent and service charge recovery
Risks
Our property disputes solicitors have some top tips for landlords to avoid problems.
Landlords:
1.Do a background check on all your tenants
2.Take a rent deposit
3.Get a guarantor if you have doubts about the prospective tenant’s creditworthiness.
4. Do an inventory before the tenant moves in
5. Ensure you have a break clause, rent review, early termination clause, dilapidations clause, landlord’s consent clause, forfeiture clause and other relevant clauses in the lease agreement
5. Insert an exclusion of security tenure in the lease at the time of grant of the lease
If you are a commercial landlord and would like some advice on dealing with a commercial landlord and tenant problem or dispute, then do call us on 01234 938089 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
If you are a commercial tenant and would like some advice on dealing with a commercial landlord and tenant problem, call us on 01234 938090 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
Rent arrears
What is it?
One of the most important issues you face as a landlord is ensuring that your commercial tenant pays rent on time. If your tenant fails to pay the rent and other sums due under a lease, there are several remedies you have which will enable you get the breach remedied and recover payment but you need to decide the best course of action taking into account your circumstances, your commercial tenant’s circumstances, current market conditions and any future plans you may have for the property. Depending on your long-term objectives, you will need to consider the action to take and how to protect your position.
Your options are (1) negotiating payment in instalments (2) forfeiture (3) drawing down on the rent deposit if there is a provision to that effect in the rent deposit deed (4) pursue a guarantor (4) pursue a former tenant under an Authorised Guarantee Agreement (AGA); (5) serve a Statutory demand followed by insolvency and winding-up (6) use the Commercial Rent Arrears recovery (CRAR) procedure – this involves instructing an enforcement agent to take control of a tenant's goods and sell them on to recover the debt. This procedure is complex -various notices need to be served on the tenant throughout the process. Certain conditions also need to be satisfied before you can use CRAR and (6) Issue Court proceedings.
If you are a landlord and your commercial tenant has failed to pay its rent, why not speak with one of our specialist commercial property solicitors on 01234 938089.
Dilapidations
What is it?
Dilapidations is a term used when referring to the condition of a commercial property during the term of the tenancy or when the lease ends. It means the same as disrepair and is linked to the commercial tenant’s repairing and decoration obligations in the lease agreement.
Why is it important?
Most commercial leases contain a clause that the tenant will be responsible for dilapidations. The landlord may serve a Schedule of Dilapidations on the tenant at different stages of the tenancy:
A schedule served during the fixed term of a lease is known as an interim schedule. It will specify the disrepair alleged by the landlord and the remedial works which the landlord requires the tenant to undertake.
A schedule served within the last three years of the term is a terminal schedule.
A schedule served at or after the end of a lease term is a final schedule of dilapidations
The difference between an interim schedule and a terminal schedule when compared with a final schedule is that whilst the first two may contain the same alleged breaches of covenant and details of remedial work required as an interim or terminal schedule in this case the tenant will not have an option to carry out the works himself since he no longer occupies the property. The landlord’s remedy is to claim damages to cover the cost of remedial works, AND loss of rent, service charges, rates, professional fees and VAT for any period during which the property is off the lettings market. This may have serious financial implications for business tenants.
Risks
Schedules of Dilapidations are often the cause of disputes between landlords and tenants, the result of which may mean court action . Tenants should ensure that they fully understand these implications and take steps at the start to minimise their liabilities before signing the commercial lease.
For instance, when negotiating a new lease, as an alternative to accepting full liability, the tenant may insist that the repairing liability be restricted to leaving the building in no worse condition than at the start of the lease. Further, the word “repair” in a lease sometimes includes a liability to renew, for example, where a roof was so dilapidated that renewal was the only practical option. To limit any repairing liability the tenant should instruct a Building Surveyor to prepare a Schedule of Condition, recording the state of decoration and any pre-existing items of disrepair.
These precautions as also relevant on assignment where a new tenant takes on the obligations of an existing tenant. Alterations and disrepair must also be considered carefully by a tenant considering assignment of another tenant’s lease. Further, as an alternative to accepting full liability if breaches and alterations are identified before the lease purchase, the tenant may be able to negotiate a reverse premium.
If you have a dilapidations dispute and need information and advice, please contact our expert commercial property lawyers.
Service of Section 146 Notices
What is it?
This is a notice under section 146 of the Law of Property Act 1925 (Section 146 Notice) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.
Why is it important?
“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant (other than a covenant to pay rent )has been breached.
For the notice to be valid and binding the notice must specify the breach complained of and if the breach is capable of remedy, require the tenant to remedy it and ask the tenant to pay monetary compensation to the landlord for the breach.
A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.
A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.
Forfeiture of leases (including possession proceedings)
What is it?
A commercial property lease usually continues until its end date unless you include a clause to end it earlier. As a landlord, you can only end a lease when the tenant fails to pay rent or fails to meet other lease obligations.
Forfeiture occurs when a landlord ends the lease due to the tenant breaching the terms of that lease by being in arrears with rent or by significantly breaching any other covenant.
Before taking action and seeking possession of the property, you should seek legal advice. If you are a tenant and want to avoid forfeiture or seek court relief from forfeiture, you should also seek legal advice. We are highly experienced in this area of law, so please contact our commercial property lawyers.
Subject to the terms of the lease agreement (legal advice should be sought) a commercial lease generally cannot be forfeited by any other breach of the lease except non-payment of the agreed rent. If a different breach of lease has occurred, then the landlord should serve the tenant with a Section 146 notice (Nazish – please connect the words “Section 146 notice” to the other places in the website where we have defined a Section 146 notice) which should state exactly what that breach is and must give the tenant a set period of time to rectify the breach.
Forfeiture Requirements:
For the landlord to exercise his right to forfeit the lease and take possession there must be an express clause in the lease that gives the landlord the right to forfeit, the breach should be a fundamental breach such as not paying rent or other form of very serious breach, the landlord must take the appropriate procedural steps (i.e. Section 146 Notice) and the landlord must not waive the right to forfeit.
If the tenant complies with the notice and remedies the breach within the given time the landlord can no longer proceed with forfeiture but if the tenant continues to commit a breach of the lease the landlord can issue proceedings for forfeiture of the lease in the County Court.
For more information on forfeiture of a commercial lease for non-payment of rent or otherwise or Section 146 Notices please feel free to contact our lease forfeiture specialist solicitors.
Service of section 25 notice and issue of proceedings
What is it?
This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954. It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act. The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.
When can the parties apply to the court?
Either party may apply to the court as soon as the tenant has received the Section 25 form from the landlord. However, it is usual practice for the parties to try to reach an agreement before going to court.
If a Section 25 form is served by the landlord, the last day for either party to apply to court is the date the tenancy will expire as set out in the Section 25 form. Whilst the parties can agree to an extension of this deadline, but they must do so in writing before the expiry of the original deadline. They can also agree to further extensions, provided they do so before the current extension runs out. If the tenant fails to apply to the court in time, the tenant loses the right to renew the tenancy.
Reorganisation & Redundancies
At risk of redundancy letter
What is it?
This is a letter that can be used to inform the employee that the employee is at risk of being made redundant.
Dismissal for redundancy letter
What is it?
Invitation to a redundancy appeal meeting
What is it?
This is a letter to an employee inviting them to a redundancy appeal meeting.
Redundancy consultation letter
What is it?
Commercial notices
At risk of redundancy letter
What is it?
This is a letter that can be used to inform the employee that the employee is at risk of being made redundant.
Dismissal for redundancy letter
What is it?
Invitation to a redundancy appeal meeting
What is it?
This is a letter to an employee inviting them to a redundancy appeal meeting.
Redundancy consultation letter
What is it?
Breaches of contract
Rent commercial property - Commercial notices
What is it?
The Landlord and Tenant Act 1954 (as amended)governs the rights and obligation of landlords and tenants of premises which are occupied for business purposes.
Why is it important?
The commercial lease notices are the forms used to end or renew a commercial tenancy. Assuming that the parties have not contracted out of the Landlord and Tenant Act 1954, each party will need to use a specific form. Landlords must use a Section 25 form while tenants must use a Section 26 form. The Section 25 Notice is a form that can be used by a landlord to either:
- end a tenancy with a proposal to start a new tenancy; or
- end a tenancy with reasons for refusing a new tenancy.
The Section 26 Notice is a form that can be used by a tenant to request a new tenancy.
There are strict time limits for serving a Section 25 or 26 notice.
Risks
If the landlord or tenant does not adhere to the time limits, they may end up losing their right to terminate the tenancy or request a new tenancy. It is therefore vital that as a commercial landlord or business tenant you clearly understand the law relating to service of commercial notices.
Please contact our commercial property solicitors if you require advice on your business tenancy or if you are a landlord. Our commercial solicitors are waiting for your call. Tel ; 01234 938098.
Commercial Landlord & Tenant problems
What is it?
Disputes can seriously affect your business as a tenant, and your investment as a landlord. When disputes arise in commercial leases they need to be addressed quickly and tactically to minimise disruption and loss.
Why is it important?
Our specialist property dispute solicitors advise commercial landlords and tenants on a wide range of issues including:
- Break notices
- Disputes concerning requests for landlord’s consent
- Property injunctions
- Forfeiture of commercial leases and applications for relief from forfeiture
- Early termination of a commercial lease
- Contested and uncontested business lease renewals
- Commercial lease agreement interpretation
- Rent reviews
- Breach of covenant
- Repair and dilapidation claims
- Rent and service charge recovery
Risks
Our property disputes solicitors have some top tips for landlords to avoid problems.
Landlords:
1.Do a background check on all your tenants
2.Take a rent deposit
3.Get a guarantor if you have doubts about the prospective tenant’s creditworthiness.
4. Do an inventory before the tenant moves in
5. Ensure you have a break clause, rent review, early termination clause, dilapidations clause, landlord’s consent clause, forfeiture clause and other relevant clauses in the lease agreement
5. Insert an exclusion of security tenure in the lease at the time of grant of the lease
If you are a commercial landlord and would like some advice on dealing with a commercial landlord and tenant problem or dispute, then do call us on 01234 938089 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
If you are a commercial tenant and would like some advice on dealing with a commercial landlord and tenant problem, call us on 01234 938090 for an initial chat, at no obligation, or fill out our enquiry form. One of our property dispute specialists will get in touch, and help you get things back on track.
Rent arrears
What is it?
One of the most important issues you face as a landlord is ensuring that your commercial tenant pays rent on time. If your tenant fails to pay the rent and other sums due under a lease, there are several remedies you have which will enable you get the breach remedied and recover payment but you need to decide the best course of action taking into account your circumstances, your commercial tenant’s circumstances, current market conditions and any future plans you may have for the property. Depending on your long-term objectives, you will need to consider the action to take and how to protect your position.
Your options are (1) negotiating payment in instalments (2) forfeiture (3) drawing down on the rent deposit if there is a provision to that effect in the rent deposit deed (4) pursue a guarantor (4) pursue a former tenant under an Authorised Guarantee Agreement (AGA); (5) serve a Statutory demand followed by insolvency and winding-up (6) use the Commercial Rent Arrears recovery (CRAR) procedure – this involves instructing an enforcement agent to take control of a tenant's goods and sell them on to recover the debt. This procedure is complex -various notices need to be served on the tenant throughout the process. Certain conditions also need to be satisfied before you can use CRAR and (6) Issue Court proceedings.
If you are a landlord and your commercial tenant has failed to pay its rent, why not speak with one of our specialist commercial property solicitors on 01234 938089.
Dilapidations
What is it?
Dilapidations is a term used when referring to the condition of a commercial property during the term of the tenancy or when the lease ends. It means the same as disrepair and is linked to the commercial tenant’s repairing and decoration obligations in the lease agreement.
Why is it important?
Most commercial leases contain a clause that the tenant will be responsible for dilapidations. The landlord may serve a Schedule of Dilapidations on the tenant at different stages of the tenancy:
A schedule served during the fixed term of a lease is known as an interim schedule. It will specify the disrepair alleged by the landlord and the remedial works which the landlord requires the tenant to undertake.
A schedule served within the last three years of the term is a terminal schedule.
A schedule served at or after the end of a lease term is a final schedule of dilapidations
The difference between an interim schedule and a terminal schedule when compared with a final schedule is that whilst the first two may contain the same alleged breaches of covenant and details of remedial work required as an interim or terminal schedule in this case the tenant will not have an option to carry out the works himself since he no longer occupies the property. The landlord’s remedy is to claim damages to cover the cost of remedial works, AND loss of rent, service charges, rates, professional fees and VAT for any period during which the property is off the lettings market. This may have serious financial implications for business tenants.
Risks
Schedules of Dilapidations are often the cause of disputes between landlords and tenants, the result of which may mean court action . Tenants should ensure that they fully understand these implications and take steps at the start to minimise their liabilities before signing the commercial lease.
For instance, when negotiating a new lease, as an alternative to accepting full liability, the tenant may insist that the repairing liability be restricted to leaving the building in no worse condition than at the start of the lease. Further, the word “repair” in a lease sometimes includes a liability to renew, for example, where a roof was so dilapidated that renewal was the only practical option. To limit any repairing liability the tenant should instruct a Building Surveyor to prepare a Schedule of Condition, recording the state of decoration and any pre-existing items of disrepair.
These precautions as also relevant on assignment where a new tenant takes on the obligations of an existing tenant. Alterations and disrepair must also be considered carefully by a tenant considering assignment of another tenant’s lease. Further, as an alternative to accepting full liability if breaches and alterations are identified before the lease purchase, the tenant may be able to negotiate a reverse premium.
If you have a dilapidations dispute and need information and advice, please contact our expert commercial property lawyers.
Service of Section 146 Notices
What is it?
This is a notice under section 146 of the Law of Property Act 1925 (Section 146 Notice) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.
Why is it important?
“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant (other than a covenant to pay rent )has been breached.
For the notice to be valid and binding the notice must specify the breach complained of and if the breach is capable of remedy, require the tenant to remedy it and ask the tenant to pay monetary compensation to the landlord for the breach.
A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.
A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.
Forfeiture of leases (including possession proceedings)
What is it?
A commercial property lease usually continues until its end date unless you include a clause to end it earlier. As a landlord, you can only end a lease when the tenant fails to pay rent or fails to meet other lease obligations.
Forfeiture occurs when a landlord ends the lease due to the tenant breaching the terms of that lease by being in arrears with rent or by significantly breaching any other covenant.
Before taking action and seeking possession of the property, you should seek legal advice. If you are a tenant and want to avoid forfeiture or seek court relief from forfeiture, you should also seek legal advice. We are highly experienced in this area of law, so please contact our commercial property lawyers.
Subject to the terms of the lease agreement (legal advice should be sought) a commercial lease generally cannot be forfeited by any other breach of the lease except non-payment of the agreed rent. If a different breach of lease has occurred, then the landlord should serve the tenant with a Section 146 notice (Nazish – please connect the words “Section 146 notice” to the other places in the website where we have defined a Section 146 notice) which should state exactly what that breach is and must give the tenant a set period of time to rectify the breach.
Forfeiture Requirements:
For the landlord to exercise his right to forfeit the lease and take possession there must be an express clause in the lease that gives the landlord the right to forfeit, the breach should be a fundamental breach such as not paying rent or other form of very serious breach, the landlord must take the appropriate procedural steps (i.e. Section 146 Notice) and the landlord must not waive the right to forfeit.
If the tenant complies with the notice and remedies the breach within the given time the landlord can no longer proceed with forfeiture but if the tenant continues to commit a breach of the lease the landlord can issue proceedings for forfeiture of the lease in the County Court.
For more information on forfeiture of a commercial lease for non-payment of rent or otherwise or Section 146 Notices please feel free to contact our lease forfeiture specialist solicitors.
Service of section 25 notice and issue of proceedings
What is it?
This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954. It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act. The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.
When can the parties apply to the court?
Either party may apply to the court as soon as the tenant has received the Section 25 form from the landlord. However, it is usual practice for the parties to try to reach an agreement before going to court.
If a Section 25 form is served by the landlord, the last day for either party to apply to court is the date the tenancy will expire as set out in the Section 25 form. Whilst the parties can agree to an extension of this deadline, but they must do so in writing before the expiry of the original deadline. They can also agree to further extensions, provided they do so before the current extension runs out. If the tenant fails to apply to the court in time, the tenant loses the right to renew the tenancy.
Issues with employer
At risk of redundancy letter
What is it?
This is a letter that can be used to inform the employee that the employee is at risk of being made redundant.
Dismissal for redundancy letter
What is it?
Invitation to a redundancy appeal meeting
What is it?
This is a letter to an employee inviting them to a redundancy appeal meeting.
Redundancy consultation letter
What is it?
Managing employee performance
Mediation
What is it?
Mediation is a process in which the parties discuss their dispute(s) with the assistance of a trained impartial third party (called the “mediator”) who assists them in resolving their disputes and reach a settlement.
Why is it important?
In small claims cases in the County Court the parties are usually asked whether they would like to use the Court’s free small claims mediation service. If the parties agree the straightforward cases are referred to trained county court staff who conduct a one-hour mediation by telephone without any cost to the parties.
Where the claim is complex the court refers the claim to the National Mediation helpline. The case is allocated to a Civil Mediation Council approved mediator who conducts the mediation for a small fee subject to the parties agreeing to be jointly responsible for the fee. About 95% of all mediations take place by telephone with a high success rate.
Risks
If mediation does not work you still have the option of court proceedings. However, it makes sense to consider mediation before you litigate. Litigation can be very expensive as there is no such thing as a cast iron case. Even if your lawyers and you are convinced that you have a very strong case a judge may not think so and you may end up paying your costs in addition to the other side’s legal costs.
For example, a claim of £6,000 will set you back £455 in fees if you issue proceedings by post or £410 if you issue your claim online. If your claim is over £10,000 you are looking at a fee of 5% of the claim up to £200,000 and £10,000 after that.
If you are instructing a lawyer, he will handle the paperwork for you and will charge a fee dependent on the size of the claim and the complexities of the matter. Representing yourself costs less but that can be a false economy when dealing with the complexities of the court system. Mediation could assist you in resolving a dispute with your debtor without having to spend money on legal proceedings.
Pure Business Law are experienced debt recovery solicitors. We provide debt recover help and advice to businesses and consumers seeking to recover debts. Call us today!
Letter accepting payments in instalments
What is it?
A letter accepting payment in instalments is a letter that accepts debt repayments from a debtor in instalments.
Why is it important?
It sets out the amount owed, as well as the dates of each payment (i.e. frequency of instalments) , the amount to be paid on each payment date (i.e. the instalment amount) , the payment method and the date the debt has to be repaid.
Risks
This letter prevents any potential legal disputes by setting out the agreement between the debtor and creditor in relation to the payment of the debt.
Letter proposing payments in instalments
What is it?
This is a letter by the debtor offering to pay off an outstanding debt by making regular fixed payments over a specific period of time. This letter is only an offer and does not constitute a legal agreement. If the creditor accepts the offer via a letter accepting payment in instalments, then that agreement will be a valid and binding agreement.
Why is it important?
This letter assists a debtor as it shows a willingness to pay off a debt and can stop a creditor from taking further action against a debtor.
Risks
If you are a business, a letter proposing payment in instalments can help your business cashflow as the business will have the certainty of receiving a specific amount of cash each month until the debt is repaid.
Our debt collection solicitors can provide you with professionally drafted instalment proposal payment and instalment payment acceptance letters at cost-effective fixed fees. Call us now!
Recover debt - Debt Management
What is it?
Cashflow is key to your business success. Keeping on top of your business debts is crucial to achieving a steady cashflow. Court action should always be a last resort due to the time and cost.
Why is it important?
Identifying a bad debt early improves the chances of recovering the debt. You have to look for signs in the customer’s behaviour that point to impending default.
If you start noticing that some of the customers who owe your business money are ignoring your emails and phone calls and are difficult to contact, are breaking their promises to pay the debt with frivolous excuses, are reluctant to agree payment schedules, have changed their contact telephone number and or address without telling you, start making excuses about business being bad or complains about contracts or the services that you provide (when you know that the services are good) you will have to act to recover the debt.
It is best to try to recover the debt yourself without seeking external help first. This would assist you in keeping open the communication channels with the customer and in retaining the customer. Keep all records of your attempts to contact the customer.
When you have exhausted all the usual methods of trying to recover a business debt such as payment reminders, phone calls, emails, debt mediation service, you may wish to write a Letter Before Action (LBA) and then issue debt recovery proceedings yourself in the County Court; issue a Statutory demand, apply for a charging order to be placed on the creditor’s assets eg buildings or land or issue a Winding -up Petition.
If all your in-house attempts to recover the debt fail, then may be time to consider the services of our debt collection lawyers or a debt collection agency.
Call us now to discuss your requirements with one of our debt collection lawyers!