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. 

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!





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Recovering a 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!





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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:

  1. end a tenancy with a proposal to start a new tenancy; or
  2. 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

What is a Contract?


What is it?

A contract is a promise or agreement between two or more parties that is legally binding.

For a contract to exist there must be:

  1. An agreement by the parties created by the offer and acceptance of specific terms or obligations by either party;
  2. An intention by the parties to create legal obligations and form an enforceable agreement;
  3. Consideration – this arises where on party to the contract promises or offers to do something for the other party which the other party accepts by giving something in return. An example of consideration can be seen when a customer agrees to buy goods from a shop owner and money is exchanged for the goods.

If you need help or advice on any contract, commercial or business law issue, please contact our commercial contract solicitors.




Breaches of contract/Breaches of covenant


What is it?

A breach of contract is similar to a breach of covenant the only difference being that the term “breach of covenant” is mainly used in relation to breaches of promises or obligations in a property deed or occasionally written contract.

A breach of contract or breach of covenant occurs when one party to the agreement fails to fulfil an obligation or breaks the terms and conditions set out in an agreement. This may occur if for instance one party fails to pay for goods or services provided by the other party or the other party fails to provide the goods agreed or fails to provide services agreed to an acceptable standard.

Why is it important?

Before you decide to sue someone for breach of contract it is always worthwhile to review the merits of your claim (seek legal advice if you are unsure) , assess the value of your claim, consider whether pursuing legal action is a reasonable and cost-effective response and consider the relationship between you and the other party to the contract. Do you want the relationship to continue? Is pursuing your claim a reasonable and cost-effective response? If you have any doubts it is always best to try to negotiate a settlement rather than go to court.

For advice in relation to a breach of contract or breach of covenant call our specialist solicitors on 01234 938089.




Contract disputes: Should I sue for breach of contract?


What is it?

It is not always easy to sue someone for breach of contract. In order to stand a good chance of succeeding in your claim you need to show that:

1.The existence of a legally binding contract. If the contract was made verbally it may be difficult to prove that there was a contract that is legally binding. This shows the importance of ensuring that all contracts that you enter into is recorded in writing. You can rely on emails and letters to prove the contract existed.

2. There was a breach of contract ie the party you are suing did not fulfil their obligations under the agreement or that they did not perform their obligations properly.

3. You have suffered loss as a direct result of the breach of contract and that you deserve to be awarded damages for the loss suffered. This is a difficult hurdle to overcome as the court will only award damages if it is sure that the loss you suffered was caused by the breach of contract, you have tried to mitigate your loss (ie taken reasonable steps to try to reduce your loss) and that the damage that you suffered was not too remote.

Litigation can be costly, distressing, damaging and time consuming.

If you have a contract dispute that is bothering you and need information and advice on any breaches of contract, please contact our commercial contract lawyers.





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Commercial notices

Notice of breach of covenants


What is it? This is popularly called a Section 146 Notice (it is a notice required to be served by section 146 of the Law of Property Act 1925 and relates solely to business tenants) 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 has been breached. For the notice to be valid and binding the notice must specify the breach of covenant and if the breach is capable of remedy , require the tenant to remedy it and 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. Risks 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.




Break notice


What is it? A Break Notice, also known as a Break Clauses or a break option, is an important contractual provision in a lease which allows either a landlord or tenant to bring a Lease to an early end. Some landlords often have a vested interest in making life difficult for a tenant seeking to exercise its option to break the lease by making the option subject to stringent conditions. Why is it important? Break Notices are akin to options and are therefore strictly construed by the courts . From the tenant’s perspective, a properly drafted Break Clause gives them the opportunity to avoid being tied into a lease that they can no longer afford. This is a safety-net for a tenant – especially if they are just starting out. Understandably though, a landlord who is receiving a steady rental income may be reluctant to lose a tenant, particularly in tough economic times. Risks Any tenant seeking to exercise the option to break the lease must check the lease carefully and ensure they follow the landlord’s “break clause conditions” to the letter. It is crucial when taking a lease that a tenant understands that the conditions of the Break Clause can easily defeat an option to break unless followed to the letter. If the conditions are not strictly followed the termination is not valid and the tenant remains a lessee until the expiry of the lease, the next break clause date or until the tenant is able to assign the lease with the landlord’s consent if there is such a provision in the lease. A properly advised tenant should refuse any condition, other than up-to date payment of principal rent and giving up occupation.




Tenants agreement to exclude security of tenure


What is it? The Landlord and Tenant Act 1954 provides tenants of business premises with rights of ‘security of tenure’. This means that once a business tenant’s lease expires, the tenant has the right to request a new lease on the same terms as the previous lease (subject to agreement on terms, such as the amount of rent, any legislative updates etc), except where the landlord has a statutory ground to refuse a new lease (for instance, if the tenant has failed to pay rent or the landlord wishes to redevelop the premises). Why is it important? When agreeing to enter into a commercial or business lease, one of the things that will be discussed when agreeing Heads of Terms is whether your lease will be ‘protected’ with security of tenure, or ‘contracted out’ i.e. excluded’ from security of tenure. It is quite common for landlords to require that security of tenure rights are excluded from a lease. They do this by asking the prospective tenant to sign a notice in front of an independent solicitor agreeing to the exclusion of security of tenure under the lease. Risks This notice means that a tenant of commercial premises will not have the automatic right to request a renewal of their lease at the end of the term of the lease, leaving the landlord free to let the property to another tenant at the end of the term. This is because landlords often wish to retain strict control over the occupation of their property. If security of tenure is excluded, you the tenant, must vacate the property at the end of the lease in accordance with its terms unless you have negotiated a new lease with the landlord separately.




Landlords notice to exclude security of tenure





Section 25 Notice


What is it? This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954. Why is it important? 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. Risks The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.




Section 26 Notice


What is it? This is a notice given by the tenant requesting a new tenancy upon the termination of the old tenancy. Why is it important? The s26 request must specify the date on which the existing lease is to end. Risks This notice cannot be served before the last year of the agreed lease term nor can it be served after the landlord has served a s25 notice.




Licence for alterations


What is it? This is a licence from the landlord to the tenant giving the tenant the right to carry out specific works or alterations to the property that is being let. The alterations may be major or minor. Why is it important? The Licence should include provisions as to the manner in which the tenant will carry out the works, timescales, reinstatement and (to the extent applicable) the Construction (Design and Management) Regulations 2015. Drawings and specifications showing the proposed works should be attached to the Licence so that it is clear what the landlord is consenting to. If the proposed alterations are not substantial (e.g. the erection of demountable partitioning or signage) you can use a simple Letter- Licence to Alter.




Section 27 Notice


What is it? A tenant has the right under s27 of the 1954 Act to bring the tenancy to an end by giving at least three months’ notice before the date on which the tenancy would otherwise expire. If the lease term has expired but the tenancy is still continuing under the 1954 Act the tenant may bring that continuing tenancy to an end by giving not less than three months’ notice in writing to the landlord.





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Breaches of contract

What is a Contract?


What is it?

A contract is a promise or agreement between two or more parties that is legally binding.

For a contract to exist there must be:

  1. An agreement by the parties created by the offer and acceptance of specific terms or obligations by either party;
  2. An intention by the parties to create legal obligations and form an enforceable agreement;
  3. Consideration – this arises where on party to the contract promises or offers to do something for the other party which the other party accepts by giving something in return. An example of consideration can be seen when a customer agrees to buy goods from a shop owner and money is exchanged for the goods.

If you need help or advice on any contract, commercial or business law issue, please contact our commercial contract solicitors.




Breaches of contract/Breaches of covenant


What is it?

A breach of contract is similar to a breach of covenant the only difference being that the term “breach of covenant” is mainly used in relation to breaches of promises or obligations in a property deed or occasionally written contract.

A breach of contract or breach of covenant occurs when one party to the agreement fails to fulfil an obligation or breaks the terms and conditions set out in an agreement. This may occur if for instance one party fails to pay for goods or services provided by the other party or the other party fails to provide the goods agreed or fails to provide services agreed to an acceptable standard.

Why is it important?

Before you decide to sue someone for breach of contract it is always worthwhile to review the merits of your claim (seek legal advice if you are unsure) , assess the value of your claim, consider whether pursuing legal action is a reasonable and cost-effective response and consider the relationship between you and the other party to the contract. Do you want the relationship to continue? Is pursuing your claim a reasonable and cost-effective response? If you have any doubts it is always best to try to negotiate a settlement rather than go to court.

For advice in relation to a breach of contract or breach of covenant call our specialist solicitors on 01234 938089.




Contract disputes: Should I sue for breach of contract?


What is it?

It is not always easy to sue someone for breach of contract. In order to stand a good chance of succeeding in your claim you need to show that:

1.The existence of a legally binding contract. If the contract was made verbally it may be difficult to prove that there was a contract that is legally binding. This shows the importance of ensuring that all contracts that you enter into is recorded in writing. You can rely on emails and letters to prove the contract existed.

2. There was a breach of contract ie the party you are suing did not fulfil their obligations under the agreement or that they did not perform their obligations properly.

3. You have suffered loss as a direct result of the breach of contract and that you deserve to be awarded damages for the loss suffered. This is a difficult hurdle to overcome as the court will only award damages if it is sure that the loss you suffered was caused by the breach of contract, you have tried to mitigate your loss (ie taken reasonable steps to try to reduce your loss) and that the damage that you suffered was not too remote.

Litigation can be costly, distressing, damaging and time consuming.

If you have a contract dispute that is bothering you and need information and advice on any breaches of contract, please contact our commercial contract lawyers.





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Issues with employer

Notice of breach of covenants


What is it? This is popularly called a Section 146 Notice (it is a notice required to be served by section 146 of the Law of Property Act 1925 and relates solely to business tenants) 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 has been breached. For the notice to be valid and binding the notice must specify the breach of covenant and if the breach is capable of remedy , require the tenant to remedy it and 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. Risks 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.




Break notice


What is it? A Break Notice, also known as a Break Clauses or a break option, is an important contractual provision in a lease which allows either a landlord or tenant to bring a Lease to an early end. Some landlords often have a vested interest in making life difficult for a tenant seeking to exercise its option to break the lease by making the option subject to stringent conditions. Why is it important? Break Notices are akin to options and are therefore strictly construed by the courts . From the tenant’s perspective, a properly drafted Break Clause gives them the opportunity to avoid being tied into a lease that they can no longer afford. This is a safety-net for a tenant – especially if they are just starting out. Understandably though, a landlord who is receiving a steady rental income may be reluctant to lose a tenant, particularly in tough economic times. Risks Any tenant seeking to exercise the option to break the lease must check the lease carefully and ensure they follow the landlord’s “break clause conditions” to the letter. It is crucial when taking a lease that a tenant understands that the conditions of the Break Clause can easily defeat an option to break unless followed to the letter. If the conditions are not strictly followed the termination is not valid and the tenant remains a lessee until the expiry of the lease, the next break clause date or until the tenant is able to assign the lease with the landlord’s consent if there is such a provision in the lease. A properly advised tenant should refuse any condition, other than up-to date payment of principal rent and giving up occupation.




Tenants agreement to exclude security of tenure


What is it? The Landlord and Tenant Act 1954 provides tenants of business premises with rights of ‘security of tenure’. This means that once a business tenant’s lease expires, the tenant has the right to request a new lease on the same terms as the previous lease (subject to agreement on terms, such as the amount of rent, any legislative updates etc), except where the landlord has a statutory ground to refuse a new lease (for instance, if the tenant has failed to pay rent or the landlord wishes to redevelop the premises). Why is it important? When agreeing to enter into a commercial or business lease, one of the things that will be discussed when agreeing Heads of Terms is whether your lease will be ‘protected’ with security of tenure, or ‘contracted out’ i.e. excluded’ from security of tenure. It is quite common for landlords to require that security of tenure rights are excluded from a lease. They do this by asking the prospective tenant to sign a notice in front of an independent solicitor agreeing to the exclusion of security of tenure under the lease. Risks This notice means that a tenant of commercial premises will not have the automatic right to request a renewal of their lease at the end of the term of the lease, leaving the landlord free to let the property to another tenant at the end of the term. This is because landlords often wish to retain strict control over the occupation of their property. If security of tenure is excluded, you the tenant, must vacate the property at the end of the lease in accordance with its terms unless you have negotiated a new lease with the landlord separately.




Landlords notice to exclude security of tenure





Section 25 Notice


What is it? This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954. Why is it important? 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. Risks The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.




Section 26 Notice


What is it? This is a notice given by the tenant requesting a new tenancy upon the termination of the old tenancy. Why is it important? The s26 request must specify the date on which the existing lease is to end. Risks This notice cannot be served before the last year of the agreed lease term nor can it be served after the landlord has served a s25 notice.




Licence for alterations


What is it? This is a licence from the landlord to the tenant giving the tenant the right to carry out specific works or alterations to the property that is being let. The alterations may be major or minor. Why is it important? The Licence should include provisions as to the manner in which the tenant will carry out the works, timescales, reinstatement and (to the extent applicable) the Construction (Design and Management) Regulations 2015. Drawings and specifications showing the proposed works should be attached to the Licence so that it is clear what the landlord is consenting to. If the proposed alterations are not substantial (e.g. the erection of demountable partitioning or signage) you can use a simple Letter- Licence to Alter.




Section 27 Notice


What is it? A tenant has the right under s27 of the 1954 Act to bring the tenancy to an end by giving at least three months’ notice before the date on which the tenancy would otherwise expire. If the lease term has expired but the tenancy is still continuing under the 1954 Act the tenant may bring that continuing tenancy to an end by giving not less than three months’ notice in writing to the landlord.





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Managing employee performance

What is a Contract?


What is it?

A contract is a promise or agreement between two or more parties that is legally binding.

For a contract to exist there must be:

  1. An agreement by the parties created by the offer and acceptance of specific terms or obligations by either party;
  2. An intention by the parties to create legal obligations and form an enforceable agreement;
  3. Consideration – this arises where on party to the contract promises or offers to do something for the other party which the other party accepts by giving something in return. An example of consideration can be seen when a customer agrees to buy goods from a shop owner and money is exchanged for the goods.

If you need help or advice on any contract, commercial or business law issue, please contact our commercial contract solicitors.




Breaches of contract/Breaches of covenant


What is it?

A breach of contract is similar to a breach of covenant the only difference being that the term “breach of covenant” is mainly used in relation to breaches of promises or obligations in a property deed or occasionally written contract.

A breach of contract or breach of covenant occurs when one party to the agreement fails to fulfil an obligation or breaks the terms and conditions set out in an agreement. This may occur if for instance one party fails to pay for goods or services provided by the other party or the other party fails to provide the goods agreed or fails to provide services agreed to an acceptable standard.

Why is it important?

Before you decide to sue someone for breach of contract it is always worthwhile to review the merits of your claim (seek legal advice if you are unsure) , assess the value of your claim, consider whether pursuing legal action is a reasonable and cost-effective response and consider the relationship between you and the other party to the contract. Do you want the relationship to continue? Is pursuing your claim a reasonable and cost-effective response? If you have any doubts it is always best to try to negotiate a settlement rather than go to court.

For advice in relation to a breach of contract or breach of covenant call our specialist solicitors on 01234 938089.




Contract disputes: Should I sue for breach of contract?


What is it?

It is not always easy to sue someone for breach of contract. In order to stand a good chance of succeeding in your claim you need to show that:

1.The existence of a legally binding contract. If the contract was made verbally it may be difficult to prove that there was a contract that is legally binding. This shows the importance of ensuring that all contracts that you enter into is recorded in writing. You can rely on emails and letters to prove the contract existed.

2. There was a breach of contract ie the party you are suing did not fulfil their obligations under the agreement or that they did not perform their obligations properly.

3. You have suffered loss as a direct result of the breach of contract and that you deserve to be awarded damages for the loss suffered. This is a difficult hurdle to overcome as the court will only award damages if it is sure that the loss you suffered was caused by the breach of contract, you have tried to mitigate your loss (ie taken reasonable steps to try to reduce your loss) and that the damage that you suffered was not too remote.

Litigation can be costly, distressing, damaging and time consuming.

If you have a contract dispute that is bothering you and need information and advice on any breaches of contract, please contact our commercial contract lawyers.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


 

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Pure Business Law is the trading name for Pure Business Law Ltd-a private limited company registered in England & Wales with company registration number 10405413. Registered office and Principal place of business : Excel House, 3 Duke Street, Bedford. MK40 3HR. VAT number 265 5386 75.

 

 

Pure Business Law is authorised and regulated by the Solicitors Regulation Authority (SRA number 635679)- we are governed by the SRA's  professional rules which may be found at www.rules.sra.org.uk. A list of our directors is available on request.  The term "director" denotes a shareholder or director of the company or an employee or consultant who is a lawyer with equivalent standing and qualifications. Calls may be recorded for security and training purposes.

 

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