Change commercial to domestic

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    Change commercial to domestic

    i have owned an end terraced commercial property for many years, but during that time i have suffered long periods of it being empty. It has now stood empty for over a year. The lease is 999 years and the freeholders have started buying the other properties in the terrace back (cheaply) and turning them into flats. They approached me and offered me £120,000 less than i paid for it (which was probably over market value) and when i said no, they then said that they will charge me £80,000 for the permission to change it into flats. This seems excessive and i will lose money if i have to pay out for the conversion and £80,000. A friend has advised me that this is illegal, because there is such a thing 'anti-competition laws' and this will be breaking that law (if i can't develop it, it will make it too expensive for you to do). Also they have affected it's potential to be rented as a commercial property BY CHANGING ALL THE OTHERS and also the area is a big building site right now, making it very unattractive to any prospective tenant. Help i do not know what to do and they people are not the easiest to deal with.

    #2
    What does your lease say about what the premises may be used for and alterations?

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      #3
      apologies for delay in response, i have been on a course all week.

      "to use the demised premises for the purpose of offices within the meaning of class A2, B1 of the town and country planning order 1987 and not to use the demised premises or suffer or permit the same to be used for any other purpose without the consent in writing of the lessor"
      and
      "to yield up the Demised Premises with the fixtures fittings improvements and additions thereto (tenant's fixtures only excepted) at the expiration of the term in accordance with the several covenants herein contained"

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        #4
        Section 19(3) of the Landlord and Tenant Act 1927 says:

        In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against the alteration of the user of the demised premises, without licence or consent, such covenant condition or agreement shall, if the alteration does not involve any structural alteration of the premises, be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that no fine or sum of money in the nature of a fine, whether by way of increase of rent or otherwise, shall be payable for or in respect of such licence or consent; but this proviso does not preclude the right of the landlord to require payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to him and of any legal or other expenses incurred in connection with such licence or consent.

        It seems you may have a problem with the red. Will conversion to flats involve any structural alteration?

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          #5
          Many thanks for taking the time to answer this, it is much appreciated. if I want to sell the flats,, then they will require new meters and digging up the road could be considered structural (so say the architect). At this point I will be happy to lease them with sub-meters to get over this problem. ideally I would like to sell eventually and I believe that after 25 years I can apply to alter the lease (from a friend who has property). The 25 years is up next January, so I may apply then and see what happens. As the freeholder has already changed the others and they are worth more as flats, I feel that this means she cannot impose a fee, which is wonderful news, thank you.

          Comment


            #6
            Steady on! I think you are jumping to conclusions.

            You need to ask your friend where he got the idea that a lease can be changed after 25 years. It's a new one on me.

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