Hi,

Sorry but this is a bit long winded.

I started my Mobile Telephone Retail based business in 1996 and took on a 3 year renewable lease on my business premises.

The premises is not in a high street location, but in a parade of shops, 200 yards before a Central line Tube Station in NE London.

In 1999 I renewed the lease with an increase of 5% for the next 3 years, culminating in a annual rent of ?300 p/annum.

When the lease was next due for renewal, I consulted my solicitor, whom advised me that as the landlord had not served notice on me, the best advice would be to not do anything, until I had received notice.

This was great advice as until October 2007, the lease has just held over and I have been paying ?300 p/annum.

The landlords solicitor has now asked for an Increase to ?000 p/annum which is more expensive that other shops of the same size locally, whom are paying ?000, but it is no big deal, as it is ?2 p/week more than what I had been paying since 2002.

The main grouse is that they want me to renew on a 10 year lease with no break clause.

I have asked for a break clause at 3 years, but am only getting a reply saying that it is not acceptable.

The industry is in a transition period, as the Networks would prefer not to have Independent Retailers selling on thier behalf, but due to Ofcom directives, they have to offer a fair marketplace with competition, so are stuck with us, but are doing everything they can to make our businesses fail, by trying to poach my customers directly, with enticing offers if they go direct.

I would like to point out that I have been in the industry since 1988, but set up on my own in 1996, and I am not one of the poor quality retailers whom have taken pleasure in making offers that they have little intention of passing onto the customer. I work on local advertising and marketing and mainly recommendation, which has provided my business with 1000 - 1500 loyal customers plus dwindling new business.

After getting no joy from my landlord with the break clause request, I appointed a solicitor, whom said to me at the initial meeting that there will be no problem negotiating what I was requesting with regards to the break clauses and he would also try to obtain a reduction in the annual rent requested. He would charge me ?25 + VAT to negotitiate the new lease which was due in March 2008 and check the new lease over for before I signed it.

He tried to contact the landlords solicitor by phone and did not get any reply from him, as he always seemed to be not available, so my solicitor then emailed him.

Still no response to his emails after a couple of weeks, so I faxed a copy of my solicitors email to the Landlords solicitor requesting what I had wanted and requiring a response. My solicitor then received a letter in the post, advising that they do not respond to emails, and only work by fax or letter, and they are not willing to budge on the terms of the new lease.

They say that I have benefited from a below market value rent, so need to recoup some of that with the new lease, which will be fixed at ?000 for 6 years and the an upward only rent review will take place.

More letters have gone backwards and forwards, with my solicitor complaining to the law society and the main partner at the Landlord solicitors, and they have agreed to extend the date to go to court until the end of May 2008.

I have now been asked by my solicitor to either accept the lease as it stands , or make an application to the court for it to decide the terms of the new lease.

The problem is that he advises that the cost of Court action could run into a possible ?0000 - ?5000 cost, which would far outweigh the cost of accepting the new lease.

My legal expenses insurance would not cover this action.

The other thing is that my solicitor has now advised that his costs have currently gone to ?000 + VAT but he will cap it at ?00 + Vat, which is fair, but not know by me beforehand.

Moving the business would, even though I would like to, be an option, as I would lose a lot of my loyal local customers, and the cost of moving would be quite high.

As far as i can see I may have to accept the new lease, and if I decide to move in the future, try and sell/pass on the remainder to a new tenant, but this can have problems if the landlord does not accept the new tenant, and I could remain liable for 10 years.

I am now in the same boat as I was last October 2007, and wonder as to what I should do now?
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Have you actually spoken to your landlords about this direct to see if you can come to terms with them? It seems to me that there is a significant risk in your taking this into court in respect of costs and you may well end up with the same or worse outcome as you face now.

A 10 year lease in today's climate is risky and regardless of sub letting clauses you will remain responsible in part to the landlord for the duration of the lease. With so much commercial property to choose from is it not possible to locate something close by at more favourable terms?
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Thankyou very much for the reply.

I have tried speaking with the landlord, whom I have always paid my rent to before it was due. I would say I have been a model tenant, with the improvements I have made to the premises in the last 12 years.

I have had to spend a lot of money on security, and fittings and fixtures, and cannot see the intransigence of the landlord, whom has advised that everything goes through his solicitor.

I am stuck in every way, and do not wish to go to court due to the costs involved.

Relocation could cost me customers and the cost of moving and installation of shopfittings, signage, telephones, alarm system etc would come to quite a bit.

The last letter from the Landlords solicitor says that they are reluctant to reduce the annual rent, and in addition are not prepared to accept the break conditions requested by the tenant, so it seems the matter will have to be settled by the court.

I have been advised that at Lease Renewal the rent can be negotiated but the terms of the lease cannot be worse than the previous lease.

The problem is that to enforce it, it has to go to court.

Could going to court be something I can do without a solicitor?
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You can proceed without a solicitor but, as unfair as it is, the courts, apart from the small claims court, are designed for lawyers. Judges are prone to talk lawyer speak and to expect you, even though appearing as a lay person, to be as fully up to date with court procedure as the other party's lawyers will be.

You need to use a good commercial solicitor who will force the landlord into a position where if he does not accept your offer and does less well in court that your offer picks up your costs and use them just for a couple of letters to see if you can get them to budge. I doubt from what you have said your current solicitor is that person.
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Thank you.

My solicitor has asked for an appointment to see how best to proceed from here.

I will recommend your option to my solicitors.

I was initially recommended to an excellent commercial solicitor by one of my customers, but it turned out that he also works on behalf of the ultimate owner of the block of premises, so there would be a conflict of interest. My landlord owns a 999 year lease.

At least the lease is in the Ltd Company name, with no personal guarantees so if the climate changed for the worse, and I had no option but to cease trading, there would be no claim on me personally.

Also, I suppose that with a long lease, if I wanted to sell the business which has a turnover of ?50,000 p/annum and net profit of ?5000 p/annum, a longer lease may be more of interest.

Just clutching at straws now, but it is a big decision I am being forced to make....
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