Commercial Property Rental Issue

Discussion in 'Property investment and tenants' rights' started by Benofore, Feb 11, 2018.

  1. Benofore

    Benofore Registered User

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    Have small commercial property - tenant has no lease as was let to in good faith during crash - good tenant rent always paid on time, 8 years in occupation. Wont accept first rent increase in 8 years. Refuses to sign a lease.
    Any advice on this topic?
     
  2. galway_blow_in

    galway_blow_in Frequent Poster

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    they are effectively squatting , the good news is its much easier to evict a delinquent commercial tenant but you will need to engage with a solicitor , no RTB or anything here
     
  3. Clonback

    Clonback Frequent Poster

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    The tenant is entitled to a long lease at this stage and you are entitled to a current market rent.
    Don't go legal until you met him again and see what common ground there is.
     
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  4. Sarenco

    Sarenco Frequent Poster

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    No Galway, the tenant is not effectively squatting and is not delinquent.

    Clonback's advice is bang on - the tenant has been in occupation of the premises for a sufficiently long time to acquire a statutory right to a long-term lease. The Court will fix the rent at the open market rent in the absence of agreement between landlord and tenant.
     
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  5. galway_blow_in

    galway_blow_in Frequent Poster

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    i stand corrected sarenco , in my haste , i misread the OP to mean the tenant is also withholding rent along with refusing to enter into a new lease

    i believe there is a mechanism where an arbiter is appointed to deal with these kind of commercial lease - payment issues

    looking over my own commercial tenants lease ( in place long before i bought the property ) yesterday and there is a reference to such
     
  6. MrEarl

    MrEarl Frequent Poster

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    Hello,

    While I think that may be a fairly standard clause in most leases, I'm not sure it's actually a legal requirement. Also, lets not forget that there is no lease in existence here.


    If it were me, I would approach the tenant and explain to them that they are not paying anywhere near market rent and you as the owner are entitled to receive market rent.

    I would tell them that you were going to bring in a recognised professional 3rd party to inspect the property and make a recommendation on what the current market rent should be. You'd like to agree a suitable time to have the professional enter the property to survey it, take measurements etc. so as to cause least disruption to your tenant and you'll give them a copy of the documented findings of the professional, to support your claim for a rent increase.

    Invite them to do the exact same thing, with a recognised professional of their choosing (and that they will be paying for), so both professionals findings can be compared and used as grounds for rent negotiation.

    If they won't agree to the above, then I would tell them that regretfully, you will have no choice but to write to them through your solicitor offering a long term lease at what you consider to be fair market rent and if they don't agree to and sign a lease within a reasonable time frame, you will have no other choice but to seek to evict them. I would tell them that this is the last thing that you want to do, that you've appreciated them being good tenants for the last number of years etc. but that they need to be fair here.

    .
     
  7. Thirsty

    Thirsty Frequent Poster

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    I may be wrong, but isn't the tenant now entitled to a 35 yr lease as its a commercial premises?
     
  8. Sarenco

    Sarenco Frequent Poster

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    Nope - in these circumstances the term will be fixed at 20 years or such lesser term as the tenant may choose.
     
  9. Thirsty

    Thirsty Frequent Poster

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    Ok so commercial tenant can look for 20 year lease then?
     
  10. MrEarl

    MrEarl Frequent Poster

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    Subject to commercial terms, including market rent.
     
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  11. grayemma

    grayemma Registered User

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    it is very difficult to make a decision to raise the rent on a property when you have a good tenant and I appreciate all the comments on this forum about good tenant/landlord relationships.
     
  12. Thirsty

    Thirsty Frequent Poster

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    Better to charge a market rent and have sufficient to cover necessary repairs / improvements than charge too little & feel resentful about every penny you spend.
     
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