Need to default on a lease- repercussions?

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Yellow Belly

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Have a friend who is 2 years into a 10 year lease (lease is actually to his limited company but has a personal guarantee signed)

Business is just barely surviving but likely to go under soon. He needs to surrender this lease but is unsure of the repercussions legally?

He had found a purchaser for his business a year ago who was willing to take on the lease, however the landlord refused consent to transfer the lease to this new party as part of the deal.

What are this man's legal options & what is the best way to handle this situation? To be honest there is no love lost with the land lord but he doesn't want to leave himself totally wide open as he has his own home to consider.

Any advice would be gratefully accepted.
 
Any lease is a leagally binding agreement. Bankrupcy etc is in effect the only semi-reprecussion-free way out for a limited company. The personal gaurantee is the problem...the details need to be looked at by a real professional. It really depends on the exact content of the agreement and the gaurantee as to what the best exit strategy is.
 
It depends on what assets your friend has.

He should try contacting the landlord and explaining the problem.

Some landlords are being flexible these days and are reducing rent although they have no obligation to do so.

Legally, your friend is obliged to pay rent for the next 8 years. In practice, the landlord will have a lot of hassle enforcing it, especially if your friend has no assets.

brendan
 
Yellow Belly said:
He had found a purchaser for his business a year ago who was willing to take on the lease, however the landlord refused consent to transfer the lease to this new party as part of the deal.
Click to expand...

This should of been the time to stand up to his landlord. Without belittling your friend, the potential purchaser may well have being of greater standing than your friend. There are so many landlords who are so damn lazy that they just can't be bothered and bully their tenants arounds.

If he has a the past matters are in writing he has some case for the landlord to answer and the friend is in a really strong position to deal with the landlord without bullying taking place.
 
The landlord cannot unreasonably withhold his consent to assigning the lease or indeed sub leasing. Seek a solicitor immediately.
 
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