Section 146 Forfeiture

[mo999]

Hi all,

I wonder if someone can assist. I have researched this problem a lot on the net but the information I have obtained contaisn a lot of gaps.

The scenario is as follows; A is the commercial tenant of a shop. He has started a new business (permitted by the Lease) from the premises and asked a friend to run it for him. The landlord has found out and served 146 notice to remedy citing an illegal sub-let. There is no sub tenancy and no rent paid. The friend who is running it is doing it as a favour for the moment with a view to future potential partnership or joint venture but no such partnership exists at present. To respond to the 146 notice can we simply deny the breach and ask the LL to prove it or can he simply forfeit. The notice does say remedy the breach but what can he do to prove he has remedied if it never occurred in the first place. A cannot stand behimd the desk in the shop as he has many other businesses which need him there.

Any assistance would be so appreciated.

Thank you.

[leaseholdanswers]

If the lease is let to A, and A is "A business Ltd", and it is now occupied by "New business Limited" then there is potential for a breach.

If it is let to A, a person, who always operated "A business Limited", which is not contrary to the lease or restricted by agreement, but now operates "New business Limited", where A is the owner and B is a friend staff or partner or owner, that is unlikely to be a sublet or assignment.

As always it depends who it was let to and what the lease says....

I suggest that a conversation " hothouse prejudice" is had with tee landlord pdq.

[mo999]

Thank you. It is the same individual so hopefully the LL will accept it. But if he does not would be not need more evidence before forfeiting the lease.

[rentreviewspecialist]

I do not understand why the suspicion; there is no illegal sub-let so no breach. Getting a friend to run the business is not a breach of covenant; it's no different to employing a manager. A tenant is not obliged to be physically present all the time to be in occupation of the premises.

[mo999]

I totally agree. But this LL is very trigger happy.

[bandontherun]

The landlord is ill informed. If he were to proceed with this matter to the County Court the judge would in my view award costs against him.

[MrJohnnyB]

It depends if all the facts stated in this post are accurate. I know of similar situations where other parties have been in occupation and 146 procedure was accepted by county court. It depends upon whether the occupier is acting as an employee of the original tenant or whether they're running things as if it were their own business. Surprisingly, particularly if its in the same town, word gets around quite quickly.

Have you had any discussions about assigning the property?

[leaseholdanswers]

I suggest that a conversation " hothouse prejudice" is had with tee landlord pdq.

I am sorry but I am pig sick of firefox updates corrupting dictionary add ons which make random corrections. And dont get me started on flash crashes...

"without prejudice and the landlord pdq! was what the post should have said.

As Johnny has indicated, as in my post, if B can be shown to be substantially owned by A then it is less likely to be an assignment.