Landlord selling up?

27 February, 2009
You have heard a rumour that your landlord is about to sell up. Naturally you are concerned, and, if the rumour is correct, what are your rights in such a situation?
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If the freehold to your premises is put up for sale, the bad news is that the landlord can sell to whoever they like. You don't have first refusal.

Although a landlord has a free rein when it comes to selling freehold premises, either they or their agents cannot show potential buyers around willy-nilly. They can only do this if such a right is reserved in the lease - and even then only at reasonable times and on reasonable notice.

So, to prevent things getting awkward and your business being disrupted, check your paperwork and discuss the situation with the landlord. Agree suitable dates and times for viewings.

What is your position?

The next point to be clear about is the company's status in the premises - is it a tenant or a licensee? If a tenant, it is likely to have greater rights and be in a stronger position. If you are unclear about where the company stands, the test adopted by the courts is to establish whether the business has "exclusive possession". If so, it is highly likely you will have a tenancy. Exclusive possession is all about showing that you can exclude everyone from the premises, including the landlord.

Best protection

If the company is a tenant, chances are it will enjoy even more protection, thanks to the 'Landlord and Tenant Act 1954'. Basically, if you are a tenant and the Act hasn't been excluded (it is something you must expressly agree to), then you cannot be evicted unless the landlord serves the correct form, a 'Section 25 Notice', which complies with the correct procedure and can actually rely upon one of the grounds under the Act.

There is even better news, because although one of the grounds available to a landlord is that they can obtain possession if they require the premises for their own use, they cannot rely on this if they have purchased the premises less than five years before the end of the lease.

If the landlord asks you to leave, firstly check to see that the Landlord and Tenant Act is applicable. Also, look at when the lease ends, because the new landlord may be unaware of the effect of the Act and how it can protect a business tenant.

Check your facts

If a new landlord appears on the scene demanding rent, don't just cough up without asking for proof that they are the new owners.

And, above all, remember that the existing lease remains valid, meaning that its terms cannot be altered.

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=== LEGISLATION NATION ===

== New publicity requirements ==

On 1 October 2008, new rules governing where and how your company displays its name took effect. What do you need to know to play it safe?

On the premises: The Companies (Trading Disclosures) Regulations 2008 introduced various new rules governing the display of corporate information on a company's premises, as well as on its documents. As a bare minimum, a company must display its registered name at its registered office, at any "inspection place" and any other location where it carries on business. An inspection place is defined as any location where a firm keeps any of its records available for inspection under the Companies Act. The exceptions are if the company has always been dormant or the premises are used mainly for living accommodation.

The company's name no longer has to appear on the outside of its premises. However, it must be displayed in a prominent place that can clearly be read and seen by any visitor coming to your premises. It could be in your reception area for instance.

On documents: business letters, order forms and websites must contain the company's full registered name, registration number, registered office and place of registration - for example, England, Wales etc. The company's full name only needs to appear on any notices and official publications, bills of exchange, cheques, orders for money, goods or services, receipts, invoices and other demands for payment.

Full disclosure: a written request can be made by anyone who has had business dealings with your firm. They can ask you to disclose the address of your registered office, any inspection place, and the types of records kept at the registered office and/or inspection place. You must provide a written response within five working days, as failure to do so could result in a fine of up to £1,000.

== Pensions ==

The Pension Act 2008, which received Royal Assent on 26 November, requires employers to offer a qualifying workplace pension scheme to their workers and to automatically enrol all eligible workers into this scheme as from 2012. Employers may choose to offer the Government's Personal Accounts scheme or another qualifying occupational or personal pension scheme.

A worker's minimum contributions to his/her pension (4% of pay) will be matched by minimum contributions from the employer (3%) and tax relief (1%).

== Welfare Reform Bill - changes to benefits ==

The Queen's Speech confirmed plans to abolish income support and move the long-term unemployed, including single parents and people with disabilities, onto Jobseeker's Allowance - so they would face benefit cuts if they do not seek work. Incapacity benefit will be reformed, so that many people now receiving benefits would also be required to seek work.

The Government has since published a White Paper on welfare reform, which suggests that, in return for benefit payments, those who have been on Jobseeker's Allowance for two years will be required to participate in full-time activity to develop their work habits and employability skills. An 'escalating sanctions regime' will be tested, supplementing financial penalties with mandatory full-time activity for people repeatedly not meeting their obligations. By October 2010, single parents with children aged seven-plus will be required to look for work in order to get benefits.

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=== At a glance ===

Tip 1: It is not unusual for landlords to use incorrect labels - for example to call something a licence, in the hope that the occupier will fall for it and move out without realising they have certain rights of occupation, if in reality they are a tenant. So be clear about the nature of any document that has been signed and don't just look at the headline. If necessary, have it checked by a solicitor/chartered surveyor.

Tip 2: Even if it is a genuine licence, it is still a form of contract and therefore has to be brought to an end correctly. Check the wording to see that the right amount of notice has been given. If it's silent on this, then you're entitled to reasonable notice. This will generally be worked out by looking at the period when you pay the licence fee - for example, if monthly, you are entitled to a month's notice. News in a nut-shell





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