Tenants in commercial property in huge rent arrears

[shakalakadoodah]

A friend has been renting out a commercial property with living accommodation for around 3 years, the tenants are in arrears of nearly £7000 and are now saying they want to leave the property in a few months time.

My friend has I believe been very naive and made previous arrangements with the tenant to repay rent verbally and via text and gone on trust. Having just heard the full situation I think there needs to be some sort of paper trail so I'm helping them to write a letter confirming amount due and what they want to do about it.

However the tenant has installed new equipment into the property and made alot of alterations without prior consent. They are basically now suggesting that my friend should reimburse them for this. From my friends point of view there was equipment left in the property for the tenant to use which is now no longer there and the alterations made are not what they would have wanted.

My friend would be happy to give them 3 months notice to leave the property subject to them paying the rent on time and if they can make an arrangement to repay the outstanding rent, but could my friend make an agreement with them that the outstanding rent will be waived as long as the tenant leaves equipment etc in the property and does not try to claim money back of them for unauthorised changes made to the property? Thanks for reading and I hope someone can give some advice so I can try to help my friend out.

I've looked at letter templates online that say something along the lines of 'failure to comply could result in court action and you losing your home' but could we say may result in losing your home and property, as in the equipment they have purchased?

Although I'm not convinced the equipment will have been paid for and I have heard on the grapevine that they didn't pay the local tradespeople for the alterations carried out!

What does the lease say?

Usually there are provisions for dilapidations and how the property is to be left when a commercial tenant leaves.

It sounds like a small claims court matter. I'm no legal expert, but could your friend see a solicitor for a free hour to clarify where she stands?

I work for a barrister who deals in this stuff on a daily basis. The first and most important thing is what is in the lease. Hopefully there is a signed lease and it sufficiently covers things like delapidation, rent arrears, notice to quit, etc. With no other proper paper trail start at the beginning with the lease. Id say you probably need a letter before action to the tenant outlining any breaches. If they are in arrears are they solvent. Costs a lot to chase money they dont have.

You really do need to get some legal advice because the tenant could take you (your friend) to court for failures on the part of the landlord and you end up in a claim and counterclaim position. Then it gets costly (would swallow up the £7000 arrears in costs plus more).

Sorry I cant be more positive but really cant stress enough the importance of proper legal advice.

She doesn't really want to involve a solicitor although I think that would be best.

I have asked her about the lease, and she said 'yeah we do have one somewhere' !! I'll try to see if I can get her to dig it out. I feel like the tenants are taking advantage and my friend has let it happen.

Thanks Staveley that's what I'm worried about if she says the wrong thing it could turn in the tenants favour and as you say cost a lot in fees etc. So first step get my friend to find the lease.

FFS. your friend has rented out a commercial property and isn't even sure if she has a lease or what it says and has made agreements about the rent verbally? some people are just too naive to be landlords.

Yep I can't see it ending well for anyone!

How come I never meet these people ? I have loads of bridges to sell.

Oh for heaven's sake, "doesn't want to involve a solicitor"?! Would she rather add more thousands on to what the tenants owe and the money it will take to restore the property to its original state (too much to hope that there is any provision in the missing lease for dilaps, I suppose?) Not involving a solicitor in the first place is how she has ended up here. I think the best you could do is not get involved in googling or helping her make unenforceable agreements with these tenants and tell her to get some legal advice!