property improvements to one that u lease...please help

[mktaylor]

when a property is leased, and it is just a shell that needs a lot of work, and a tenant takes it on and spends thousands on it doing it up and turning it into a hotel and building a business, what are their rights when the term of the lease is over? could they claw back cash from the land lord? or is there anything that the tenant can do? the lease was drawn up 8 years ago with two years left running on it, it does fall under the land lord act. the lease states that the property is to be left in no worse state than when it was found...well that would be impossible unless a bomb explodes in it!

please help me with this

[yeahbutno]

As long as your lease is written under the Landlord & Tenant Act, then you have security of tenure. You will be entitled to a new 10 year lease, although you will have to pay the going rate rent-wise. Not quite sure if you're entitled to insist on that being based on the original shell you rented, or the habitable business premises you have obviously turned it into. :confused:

There are some extreme circs where the landlord can apply for vacant possession, but then you would be enttled to compensation. However, unless he's made any such noises, I'd assume you'll be getting a new lease.

[Tax Accountant]

You ask ''what are their rights when the term of the lease is over? could they claw back cash from the land lord? or is there anything that the tenant can do? ''

I am no expert on this subject but would think that you have absolutely no right to claw-back cash from the landlord when your existing lease expires. You incurred the expenses off your own back knowing that you had a lease of only 10 years and presumably your business benefitted from the expenditure.

You could certainly renew the lease and then pass the lease on to another person who may be prepared to pay you a premium for the benefit of getting a lease at (may be) an attractive rental.

Ramnik

[Paul_f]

This is a classic case of RTFL - or read the................lease.

If your current lease states that "tenants improvements are disregarded" then no, you can't claim anything towards improvements.

Your lease also might have stated that you are obliged to "put & keep in repair" the premises, or "keep in repair". The former means you have an obligation to improve the property at your own expense and keep it in good order thereafter, and the latter, keep it in the condition you took it over in. As it was a shell then it would have been up to you whether you improved it! Clearly you had no choice but many tenants enter into leases without remotely understanding what they are signing. Were you in this category?