New lease

[alexhvn]

We are newbie to all this so sorry if this subject has come up before.

We took on a shop with 3 floors on a lease of 10 years.

There is a break clause in 5 years, which if we decide to leave we have to pay the penalty of 9 months rent of £14,062.5 , is this normal procedures?

And say for instance if we fall out on partnership or business not doing so well, what are our options? as I've found out that it's very difficult working with the partner and making descisions, especially when we are related in the family.

Any info will be much apprecaited. THANKS

[yeahbutno]

A commercial lease is different from a residential lease in so far as both parties (landlord and tenant) are classed in law as "equals" (I'm sure there's a correct legal phrase for this). It would therefore be far more difficult to claim a certain clause is unfair, if you were willing to agree to it in the first place.

I'm not too familiar with break clause penalties; the only one we operate is a clean break with no compensation paid either way, but we were OK with that arrangement and so were our tenants, so it was never discussed or negotiated on. I'd have thought the provision for a decent written notice period would be more common than compensation, but as I say that is what you signed up to, and that is presumably what your landlord will expect you to honour.

Obviously, if your business were to fail completely, then the lease would probably be terminated by the landlord, but be aware that he can probably persue yourself and your partner for rent and/or compensation. If you have a fallig out, then one of you might consider selling your half of the business either to the other, or to a third party.