Legal Interpretation Needed!

[monkeygirl 10]

Hi

 

I will be ringing my solicitor on Monday about this but I have just received through the Lease on a commercial property I was / am looking to rent. Part of the business is hiring out one of the rooms on an hourly rate to other counsellors. I checked whether this would be permitted when I viewed the property and again via email to the estate agent when i got the heads of terms. His reply was, "Yes, charging the room out on an hourly rate is fine, so long as no formal Landlord and tenant relationship is created between yourselves."

 

So in the lease it says this which to me says I can't. If anyone could interpret this to English it would save me a nervous weekend as it says to me that I can't (which would mean the end of the lease as it was a key part of my business plan). Thank you in advance anyone who can help with this!!

 

 

Underlettings

The Tenant shall not underlet the whole of the Property except in accordance with this clause nor without the consent of the Landlord, such consent not to be unreasonably withheld or delayed.

The Tenant shall not underlet part only of the Property.

The Tenant shall not underlet the Property:

together with any property or any right over property that is not included within this lease;

at a fine or premium or reverse premium; nor

allowing any rent free period to the undertenant that exceeds the period as is then usual in the open market in respect of such a letting.

The Tenant shall not underlet the Property unless, before the underlease is granted, the Tenant has given the Landlord:

a certified copy of the notice served on the undertenant, as required by section 38A(3)(a) of the LTA 1954, applying to the tenancy to be created by the underlease; and

a certified copy of the declaration or statutory declaration made by the undertenant in accordance with the requirements of section 38A(3)(b) of the LTA 1954.

Any underletting by the Tenant shall be by deed and shall include:

an agreement between the Tenant and the undertenant that the provisions of sections 24 to 28 of the LTA 1954 are excluded from applying to the tenancy created by the underlease;

the reservation of a rent which is not less than the full open market rental value of the Property at the date the Property is underlet and which is payable at the same times as the Annual Rent under this lease (but this shall not prevent an underlease providing for a rent-free period of a length permitted by clause 18.3©);

a covenant by the undertenant, enforceable by and expressed to be enforceable by the Landlord (as superior landlord at the date of grant) and its successors in title in their own right, to observe and perform the tenant covenants in the underlease and any document that is supplemental or collateral to it and the tenant covenants in this lease, except the covenants to pay the rents reserved by this lease; and

provisions requiring the consent of the Landlord to be obtained in respect of any matter for which the consent of the Landlord is required under this lease,

and shall otherwise be consistent with and include tenant covenants no less onerous (other than as to the Annual Rent) than those in this lease and in a form approved by the Landlord, such approval not to be unreasonably withheld.

In relation to any underlease granted by the Tenant, the Tenant shall:

not vary the terms of the underlease nor accept a surrender of the underlease without the consent of the Landlord, such consent not to be unreasonably withheld;

enforce the tenant covenants in the underlease and not waive any of them nor allow any reduction in the rent payable under the underlease; and

ensure that in relation to any rent review the revised rent is not agreed without the approval of the Landlord, such approval not to be unreasonably withheld.

[BuildSocial 10]

From what i gather, this relates to formally letting part of the building on a more permanent basis, as in, paying rent each month, with a lease etc. Hiring by the hour shouldn't be an issue.

 

Please note: I am not a legal professional!!!

However, I had a similar business which hired out rooms, the lease stated that we couldn't sublet; hiring by the hour was never an issue.

 

Good luck

[monkeygirl 10]

Thanks BuildSocial. That's really helpful and just puts my mind at rest enough so I can get on with the weekend until I can talk to the solicitor on Monday. It's a big one as I couldn't afford the new premises without being able to rent out the room - so thanks :-)

[Guest]

No, unless you are subletting part of the premises it is fine.

[andrejuan 10]

It looks like a standard section in the terms. It does say reasonable permission will not be withheld. You can get a little addition written in but they would normally give permission to your plans.

[Guest]

It looks like a standard section in the terms. It does say reasonable permission will not be withheld. You can get a little addition written in but they would normally give permission to your plans.

 

It is pretty standard, but the clause relates to under letting which isn't what the OP would be doing so it isn't relevant anyway.

[monkeygirl 10]

Thank you for all your replies.

 

I have spoken to my solicitor today and, to my horror, he has said that renting the room by the hour, according to this clause is NOT allowed. he has rung the landlord's solicitor and is attempting to have a clause put in so it is allowed. to be honest, i will be furious if this isn't allowed as i checked when i viewed the property and i checked when i got the head of terms and have it in writing from the estate agent that it is allowed when i double checked it. This was going to be my main source of profit for the move so the whole thing will be off if it doesn't go through. i'm now waiting for the landlord to respond to their solicitor. so.... fingers crossed otherwise i will have wasted since april til now :-(

[Chez2 10]

Thank you for all your replies.

 

I have spoken to my solicitor today and, to my horror, he has said that renting the room by the hour, according to this clause is NOT allowed. he has rung the landlord's solicitor and is attempting to have a clause put in so it is allowed. to be honest, i will be furious if this isn't allowed as i checked when i viewed the property and i checked when i got the head of terms and have it in writing from the estate agent that it is allowed when i double checked it. This was going to be my main source of profit for the move so the whole thing will be off if it doesn't go through. i'm now waiting for the landlord to respond to their solicitor. so.... fingers crossed otherwise i will have wasted since april til now :-(

 

Did you have sent contracts in mind for people renting out the room each week for so many months in advance? If not, it sounds like a very risky business plan to put this as your (almost) sole source of income.

[monkeygirl 10]

No, but I have a years worth of doing this so have an idea of what the least amount I am likely to get and anything on top is a bonus. It's not the only source of income but it is the main way I can increase my profit which will make the move worthwhile and help me to make money without necessarily doing more hours - if that makes sense.

[BuildSocial 10]

It sounds like a perfectly normal business plan to me.

[Chez2 10]

It sounds like a perfectly normal business plan to me.

 

What; renting a room on an ad hoc basis without a contract? Its not a very sound business plan if its something you depend on, as mentioned by the op. I agree its fine if the whole business plan doesn't fall down without ad hoc rental.

[monkeygirl 10]

With all respect Chez 2, in the field of work that I am in it is something that is done quite a lot. The business plan that you seem to doubt has been put together with Business Sheffield - who know their stuff. I too know my "market." I could put together a full explanation but the title of this post was asking for some legal interpretation - not comments on my business plan. So please can we keep any comments to that. Thanks