Commercial Lease Guarantee

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    Commercial Lease Guarantee

    I am a Guarantor for a commercial lease. The Landlord has forfeited the lease for non payment of rent and is now demanding payment from me. However, the rent being demanded is not only the unpaid rent up to the point of forfeiture, but also rent after that which would have been paid if the lease had not been forfeited (until a new tenant is found). I understand that I am liable for the former, but am I liable for rent after the forfeiture when the tenant's obligations ended? I'd appreciate any comments, thanks.

    #2
    Was a deed of surrender entered into or were the locks changed? How was the property surrendered? In any event if the lease was forfeited as you say then obviously your liability does not extend beyond the date of forfeiture - or this is my understanding.
    [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

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      #3
      Originally posted by MrJohnnyB View Post
      Was a deed of surrender entered into or were the locks changed? How was the property surrendered? In any event if the lease was forfeited as you say then obviously your liability does not extend beyond the date of forfeiture - or this is my understanding.
      I agree. In theory, L could have not forfeited but instead demanded from G all of the rent payable by T up to term expiry date.
      By opting to forfeit, L loses all post-forfeiture rent.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #4
        So in fact if a Landlord has a Guarantor for a commercial lease and the tenant vacates leaving unpaid rent, the landlord need do nothing as he has a legal right to expect the Guarantor to be entirely responsible for the rest of the period of the lease irrespective of the term remaining.

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          #5
          Originally posted by Always Problems View Post
          So in fact if a Landlord has a Guarantor for a commercial lease and the tenant vacates leaving unpaid rent, the landlord need do nothing as he has a legal right to expect the Guarantor to be entirely responsible for the rest of the period of the lease irrespective of the term remaining.
          In this situation the G should approach the LL to try and mitigate their losses - propose a capital sum to terminate their obligations, or work to try and assign lease etc.

          LL should have issued a statutory demand against G - forfeiture of lease by way of peaceable re-entery should really only be an option whereby the T has a saleable asset - in any event T can seek relief from forfeiture anyway.
          [I]The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the relevant facts[I]

          Comment


            #6
            Originally posted by Always Problems View Post
            So in fact if a Landlord has a Guarantor for a commercial lease and the tenant vacates leaving unpaid rent, the landlord need do nothing as he has a legal right to expect the Guarantor to be entirely responsible for the rest of the period of the lease irrespective of the term remaining.
            Yes- there's even a Court case that holds just that.
            See Reichman and Dunn v. Beveridge and Gauntlett (http://www.bailii.org/ew/cases/EWCA/Civ/2006/1659.html)
            and post #5 on http://www.landlordzone.co.uk/forums...man#post212019
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


              #7
              Thanks everyone for your replies. It's an interesting one...

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