Company Let Permitted Occupier

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    Company Let Permitted Occupier

    Hi I have a Company Let agreement with a large local company. The property is in its third year of letting with the same company and the same permitted occupier. Each year a new 12 month contract has been signed. The company contacted me the day before the new signed contract was due to commence in July to say that the permitted occupier would be moving out sometime in August. A new prospective occupier from the same company viewed the property without my knowledge, and in attendance was the new employee, a company representative, and my agent who arranged the original contract. I was not informed of this until I was told that they had an employee who would like to move into the property.

    The current agreement does not permit a change of occupier because the Permitted Occupier is a defined term in the contract and it names the individual concerned. The company has sent me a letter of variation to sign which provides for them to change the permitted occupier at will and upon notification, but this document is an addendum and all of the terms of the contract remain in force, so it is at odds with the defined terms. I have declined to sign the letter of variation and offered to consider a new contract with the company with the new employee as the permitted occupier, subject to legal advice. This has been declined by the company so nothing has been agreed.

    Meanwhile ... the company were late paying the first rent instalment, in breach of the terms, but have now since paid. Also the permitted occupier has now moved out of the flat without notification and it has been left vacant, in breach of the terms, for the new employee to move in. However, today I have been told that the keys are going to returned to the agent and that the company are not going to pay any more rent.

    I have inspected the property with permission as I have a spare set of keys.

    I am concerned that I now have to take legal advice. Any help or advice that can be offered here for immediate next steps would be appreciated?


    #2
    The law in this case is that for commercial tenancies. However, if you terminate the company tenancy, you may end up with their tenant as a residential tenant,

    The general advice on the forum is not to enter such agreements in the first place.

    Comment


      #3
      What does the agreement say about how it can be terminated?
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Thanks for the advice. Are you saying that a Residential Company Let comes under common law and that the general advice is not to enter into a Company Let? Also the property is vacant and I'm not expecting any new occupier? Thanks

        Comment


          #5
          The tenancy can only be terminated by giving 1 month's notice prior to the end of the 12 month term. There are no break clauses.

          Comment


            #6
            Originally posted by bertpentax View Post
            The tenancy can only be terminated by giving 1 month's notice prior to the end of the 12 month term. There are no break clauses.
            In which case, you should probably relet it and try and recover the rent for the interim period from the company.
            They probably won't pay and could argue that the contract was frustrated by your refusal to allow a new employee to take over the tenancy - which is probably incorrect, but it will make things more complicated.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              The current contract names the permitted occupier as a defined term and the contract cannot be assigned or sublet to anyone else. I don't see any terms to allow a new employee to take over the tenancy. I said that I would be happy to consider the company entering into a new agreement so that the new occupier is named. However, this was before the permitted occupier defaulted by moving out of the property. I am also happy to relet. Thanks

              Comment


                #8
                That contract is too inflexible to work in real life though,
                The named person is a great mechanism for making sure you're comfortable with whoever's in the property (which is one of the reasons people here don't like this kind of arrangement), but the company can't stop someone leaving to align with the contract periods.

                What you want is the agreement to specify that only the permitted occupier is allowed to reside in the property and then define the permitted occupier as person x.
                Then, when the person needs changing, a simple agreement that from date y the permitted occupier will be a new named person will suffice.
                That doesn't assign the contract.

                I quite agree that you don't want to change the basis of the agreement to the extent the company wanted, but the lack of flexibility seems to have ended quite a sensible deal.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  I would have thought that ... any frustration of contract is self-induced as the company has allowed the occupier to vacate the property and this was reasonably foreseen rendering the company at fault?

                  Company Let Tenancy Agreement

                  VACATION - Not to vacate the Premises except on the expiration of the Tenancy

                  PERMITTED OCCUPIER - The Tenant shall not suffer or permit the Permitted Occupier to commit any acts commissions or defaults ... which are or would be in breach of the Tenants obligations

                  Comment


                    #10
                    I agree that, in hindsight, the contract is too inflexible to work for the Company. There is no mechanism to change the permitted occupier. However that was not required when the contract was signed. That's why I have offered a new contract were this will be possible but they have rejected this. The letter of variation proposed by the company does not add the mechanism required it just allows for them to notify of a new occupier.

                    The deal may well come to an end but this deal or any new deal will require a more flexible contract if they want to change the occupier.

                    Comment


                      #11
                      The company shouldn't have renewed for 12 months without being sure the employee would be there for that amount of time.
                      But they can't have stopped their employee leaving the business (which is what I guess is what has happened).

                      Which leaves them in breach of their contract.
                      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                      Comment


                        #12
                        I can understand that the company wouldn't have wanted a new 12 month contract for a new employee, because the new employee might not stay that long.

                        And you, quite reasonably, wouldn't want to give them the ability to put anyone into the property.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          Originally posted by jpkeates View Post
                          The company shouldn't have renewed for 12 months without being sure the employee would be there for that amount of time.
                          But they can't have stopped their employee leaving the business (which is what I guess is what has happened).

                          Which leaves them in breach of their contract.
                          I agree. The employee is on a long term contract with the company and has been in the property for over 2 years, I have had no problems there. He hasn't left the business he has rented a larger property where he can house overseas family and nanny. I have offered a new contract with the ability to change the occupier when required, with all of the terms and conditions which go with that. But I have rejected the letter of variation because it does not cover all of the terms and provide the mechanism to change the occupier in future, so does not rewrite the contract sufficiently. Meanwhile the occupier has moved out to the new big house before any agreement has been reached on a new contract.

                          "Which leaves them in breach of their contract."

                          I am uneasy now at negotiating anything further that will serve effectively for me to be entering into an agreement to rectify their breach.

                          Comment


                            #14
                            Yes, so relet it and attempt to recover the missing rent from the company.
                            You should win in the end.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              Originally posted by jpkeates View Post
                              Yes, so relet it and attempt to recover the missing rent from the company.
                              You should win in the end.
                              Yes, thanks for the advice to relet. I am wondering as this is common law, and there is 11 months left on the contract, whether I should accept surrender and mitigate losses ... or whether to insist on paying rent till the end of tenancy - on the basis that landlords cannot later recover damages for rent having accepted a surrender?

                              Comment

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