Success Story: Alterations To Business Premises Almost Leads To Loss Of The Lease

Businesses leasing commercial premises can sometimes find themselves in a situation where they need to expand – physically. This may require alterations to the premises they rent, such as making changes to the internal configuration of the leased space – adding or removing walls, even extending the unit by adding an outbuilding.

If a business has occupied the leased unit for sometime, it’s easy to forget that your have an obligation to discuss changes to the leased property with the landlord first; unless of course this was already agreed up front with the lease.

Failure to do so can lead to termination of the lease, or loosing the right to extend or renew the lease in the future. If that’s not bad enough, you would also have to reinstate the premises to their original condition, at your expense.

This almost happened to a client of ours, but we found a way out.

Case Summary:

A client approached VLCW for a second legal opinion. The client occupied commercial premises under a business lease and ran a substantial and very profitable business there. The client innocently, but in breach of the lease, carried out substantial alterations to the premises without the landlord’s prior written consent.

The landlord imposed a rent stop, and with assistance of its surveyors and solicitors served a section 146 Notice to forfeit or bring the lease to an end.

The landlord not only required our client to vacate the premises, but also to reinstate the property and pay for his survey and legal fees. After a thorough examination of the section 146 Notice and all evidence from the time of the case, we found the section 146 Notice to be invalid because:

  • it cited incorrect lease clauses
  • it was undated
  • it omitted to include a statement to confirm our client’s entitlement to serve a Counter Notice
  • the landlord had in fact waived the breaches of lease

Outcome:

As a result and following further discussions with the landlord’s solicitor, the section 146 Notice was withdrawn, the alterations were approved retrospectively by way of a retrospective Licence, the client avoided paying the vast majority of the landlord’s surveying and legal costs and more importantly avoided any interruption to its business.

Check the facts, get a second opinion, it may save the day

It always pays to check the facts of the situation, as technicalities can bring a case down in your favour, if they are thoroughly investigated by a company like VLCW.