Tenant break Commercial Lease and ran

[stephenb465]

Advice needed.

Background info: My ex-partner and myself had a property where we rain a business from it, we separated I kept ownership of the property and she rented it off me whilst running the business.

We had a basic Commercial Property Lease Agreement drawn up and in place.

Now, last week I noticed that she hadn't paid any rent for the week, so today I was going to e-mail here to see what’s happened. But I got an e-mail from a neighbor telling me the it's vacant and now the neighbor what’s to lease the property. That's good news

Now the lease was for two years and one year has gone by. Ending 20 March 2010

What should I do, call a property lawyer, what am I entitled to. Or more precise, what is the procedure I should carry out.

No Bond was paid.

I’m at the moment working overseas but plan to return to Perth to sort this out, probable in 4 weeks time.

Any guidance would be appreciated

 

[NedKelly]

It may be good news that the neighbor wants to lease the property but unless you formally terminate the existing lease before signing up a new lease you will be digging yourself a big hole that could cost you dear.

 

[nonrecourse]

It may be good news that the neighbor wants to lease the property but unless you formally terminate the existing lease before signing up a new lease you will be digging yourself a big hole that could cost you dear.

Now Ned as he is overseas it is unlikely that a new lease will be signed immediately. If the tenant has done a midnight flit it may be difficult to serve the previous tenant with a notice to vacate if the rent is unpaid after 14 days.

Best option would be to serve the papers to her solicitor

If the tenant has emptied the shop and the doors are closed then there is in most leases a clause that flags if the business is no longer operating then the tenant is in breech.

Another point is if the building is left untenanted I think it is three months then the building insurance is null and void if the insurer is not notified.

A final point the landlord is also able to claim from the previous tenant the make good provisions in the lease as well as expense of advertising and reletting costs

 

[Perp]

Ouch - ex-partner doing a runner on you, that's pretty awkward.

You should definitely get a solicitor to look over your lease and advise you on the appropriate course of action. You could do it yourself, if you're confident in your ability to read legal documents, but I prefer to leave it to the experts, personally.

As has been pointed out by Ned, getting the termination process wrong can be very costly, if you're found to have illegally evicted her.

At least you have another tenant lined up; that's good news!

 

[Dazz]

Any guidance would be appreciated

Hiya Stevo,

The best way to move forward is to simply recognise where you are right now and change things for the better.

Tenant is your ex. Not good.
You have a rubbish Lease. Not good.
You don't have any bond. Really not good.
Tenant has buggered off without paying rent. Could be excellent.
Next door neighbour has indicated interest only - no terms discussed - that's neither here nor there yet.
You're physically not there to inspect and sort things out. Not good.


It sounds like you've taken a very casual "she'll be right" approach to the Lease thus far and now it is coming to bite you on the bum.


During the next 4 weeks, I would suggest you ;

(a) Fire off a letter formally ending the Lease.
(b) Have a chat with the neighbour and open negotiations.
(c) Pay alot for a decent Lease.
(d) Sign same and get your property back on track.

You are in a really dreadful position and you need to spend alot of time / effort and cash to get yourself into a better position next time.

Little snippets and tidbits from the forum won't cut the mustard.

 

[NedKelly]

Where is the property? Maybe some of us here can pop around and take a few pictures if it local, just to make sure it is not a wind up by the neighbor.

 

[stephenb465]

I'm off to perth to fix everything

TPFKAD, You may have a point there, Yes I have taken a casual approach to leasing this property, maybe I'm too trusting and this is a big lesson I’m having to take.

I’ve decided to make my way to Perth this Friday so I can sort things out personally, Yes I’m going to see a Solicitor and seek advice and get a new lease agreement written up for the next tenant. I’ll get the Solicitor to represent me for any thing that may be due, whilst I’m back at work in PNG. By the way, the rent is worth $850 per week. And the place is rented in South Fremantle, WA

This is a big lesson for me, pay now or pay much more latter,

Thanks for your support, and thanks TPFKAD for not pulling any punches,

I had planed to go to Vic and purchase a investment property on my next break, I guess this has put me back a couple of months, but I still have a goal to have two ip by the end of the year, this time I get good people managing the lease

 

[steveadl]

Stephen, excuse me as this is so obvious I'm sure you would have already considered it, but just in case:

Since you had a lease with your ex and it all sounds too comfy and unprofessional - make sure when you get the ball rolling on the new lease you bring the lease up to current market rates for the area. I believe commercial rates in WA have gone up considerably in recent years, so perhaps you're not aware of how much more you could possibly get with the new tenant.

Lease breaks half way through are a great opportunity to get higher rents quicker.

 

[stephenb465]

Final Update

Hi there,

I'm back from Perth and at the end of the day, I'm happy with the outcome

I arrived into Perth on Friday night and Saturday I got the keys off her lawyer, bit nervice I was, as I didn't know what games they were playing. I was thinking that the lawyer wanted me to sign something before giving the keys.

But at that stage as far as I was concerned, she had done a runner and I only found out by accident with the next door neighbor e-mailing me showing interest in renting the place.

I latter found out that her lawyer had sent me document, to an old e-mail address, telling me that they were breaking the lease and if I fight it, I will be up for all costs, I guess they found some sort of loophole.

I’ve decided to let things go and not fight for the back rent, about 4 weeks (approx. $3400) and future losers I will carry whilst I find a new tenant.

I now have a real property manager that I have signed up for, Very surprised on their fees and chargers its like 6 weeks rent they take for a letting fee and than they charge a management fee, thank goodness they charge the tenant for that, But I guess if it gets leased for 3+ years and I can forget it, it’s a big win for me, (cash flow positive)
I will make sure I get a real lease document, one positive to my terms.

Thank you for you advice everyone.

 

[Ridin-High]

Hi there,

I'm back from Perth and at the end of the day, I'm happy with the outcome

I arrived into Perth on Friday night and Saturday I got the keys off her lawyer, bit nervice I was, as I didn't know what games they were playing. I was thinking that the lawyer wanted me to sign something before giving the keys.

But at that stage as far as I was concerned, she had done a runner and I only found out by accident with the next door neighbor e-mailing me showing interest in renting the place.

I latter found out that her lawyer had sent me document, to an old e-mail address, telling me that they were breaking the lease and if I fight it, I will be up for all costs, I guess they found some sort of loophole.

I’ve decided to let things go and not fight for the back rent, about 4 weeks (approx. $3400) and future losers I will carry whilst I find a new tenant.

I now have a real property manager that I have signed up for, Very surprised on their fees and chargers its like 6 weeks rent they take for a letting fee and than they charge a management fee, thank goodness they charge the tenant for that, But I guess if it gets leased for 3+ years and I can forget it, it’s a big win for me, (cash flow positive)
I will make sure I get a real lease document, one positive to my terms.

Thank you for you advice everyone.

Good to see you happy, don't worry about the ex, may u prosper