Alex had an office building in Stockton-on-Tees which was occupied by tenants. The landlord had verbal agreements with his tenants, however there were no formal written commercial leases in place.
Problem: How to sell a commercial property without a lease?
A buyer would require sight of the written leases before he/she can buy a commercial property. With no lease in place, the current commercial tenants can easily say they were given very attractive terms (verbally). This clearly poses a high risk and therefore makes the commercial property unmortgageable.
Under The Landlord and Tenant Act 1954, business tenancies without a formal lease in place can still receive legal recognition if an oral agreement was made and/or the tenant has paid regular rent for over a year – ultimately, allowing the tenant a favourable position in law to retain occupancy of the building. This situation means considerable delays to the landlord if they want to sell, and spiralling costs in dealing with removing the tenants.
Option 1: Repossess the property
Due to ill health, Alex felt unable to continue to manage the property. He did not want the hassle of evicting the tenants or the legal repercussions of attempting to peacefully repossess a property with no commercial lease. (If your property does have an active lease, the relevant procedure would involve a commercial lease forfeiture – even then, the tenants have 6 months to appeal based on certain legal grounds or financial hardship).
Nothing is simple in the property world, that’s why we always recommend taking legal advice when buying or selling business property.
Option 2: Sell your commercial property with tenants
We often find ourselves dealing with unmortgeable commercial properties, especially in situations where landlords do not have the time, patience or legal knowhow to proceed towards eviction and repossession.
We work with trusted specialist solicitors on your behalf to ensure all the red tape is dealt with efficiently, and the damage is limited.
Property Saviour came to Alex’s rescue after he found us online – we were able to view the property and make a realistic cash offer, which Alex accepted.
Result: Tenanted office building sold for cash!
We paid his legal fees and completed the sale of the office building really quickly – within 2 weeks. Alex could then concentrate on his wellbeing, with the peace of mind that he was now free from potential legal wrangles and stress.
