Please Note: This Article is 7 years old. This increases the likelihood that some or all of it's content is now outdated.

2 years ago I purchased a company with a 10 year lease from my ex boss, on a 10 year lease, the lease was set up by a solicitor. After 2 years the business is struggling and is not viable. I feel that my solicitor ill advised me as there was no break clause mentioned. Where do I stand on this?

With a commercial lease you are committed to the contractual term – ie you will be required to pay the rent whether or not you occupy the premises.

Before taking on this sort of commitment you should seek expert advice and also do some homework yourself – there’s lots of information on this available on the internet – see

You have several options:

1    Speak to your landlord and explain your predicament. If he knows that trying to extract rent from the company (or yourself if you gave directors guarantees) is a hopeless case he may be willing to release you from your contract (yes, some will do this) or otherwise take a negotiated cash settlement. This would be by way of a compensation figure agreed between you to cover loss of rent and re-letting costs. This way you can both move on.

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2   Assign the lease. Usually this means selling the business with the lease, but in your case the business has no value, so you are merely re-letting the premises. A landlord cannot unreasonably refuse or delay assignment providing the lease allows this – most do. However, he can refuse if the tenant is unsuitable (eg does not pass a credit check) or the proposed use is not acceptable – see the use clause in the lease.

3    You can sub-derlet – ie you can let to your own tenant. You can only do this if the lease allows it and with the landlord’s consent.

4    Walk away and let your landlord sue you for the rent. If your company is to be put into administration then the landlord will have to stand in line with your other creditors. However, if you have given persoanl guarantees as a director or if the lease is in the names of the directors (savvy commercial landlords tend to ensure this is the case, particulalry with small or new companies) then you could find yourself personally liable.

©LandlordZONE All Rights Reserved – never rely totally on these standard answers. Before taking action or not, always do your own research and/or seek professional advice with the full facts of the case and all documents to hand.

Please Note: This Article is 7 years old. This increases the likelihood that some or all of it's content is now outdated.
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