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Don’t get fleeced over your commercial lease

Don’t get fleeced over your commercial lease

A good Landlord and Tenant relationship can often mean that the renewal of a commercial lease is done so privately and without the help of a Solicitor.

However by doing this the parties are unlikely to obtain the consent of a lender who has a charge registered against the property. Whilst the consent of such a lender may have been obtained on the original lease, it is important for both Landlords and Tenants that this is acquired on any renewals or variations of the lease.

From a Tenant’s perspective, failure to acquire the lenders consent has different implications depending on the type of lease you are entering into. The primary concern is that, should the Landlord default on his mortgage, the lender is entitled to repossess the property under their mortgage agreement. Without the consent of the lender to the lease, a Tenant has no right to occupy the property and the lender can sell the property onto a third party free of the lease.

Tenants should also note that lenders may be able to carry out enforcement actions even if a Landlord hasn’t defaulted.

Furthermore, where a lease is granted for more than seven years it is required to be registered at the Land Registry. The Landlord’s title will contain the lender’s charge which is typically protected by a restriction on any disposition of the Landlord’s title and would accordingly require evidence that the consent of the lender has been obtained. Without this consent, the lease cannot be registered.

Finally, it is important to note that the lender is under no obligation to provide a decision quickly or even to consent to the lease. When acting for Landlords or Tenants, the Lawson-West Commercial Property team raise the issue of consent early on in the transaction to help to avoid any unnecessary delays.

If you are a Landlord or Tenant and want to be assured you receive the best advice contact Rebecca Beswick on 0116 212 1000.

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Coronavirus:  We are pleased to announce we are Open for Business

Even during Leicester’s most recent, extended lockdown, you can be assured that it is ‘Business as Usual’ at Lawson-West and we're here to help you with your legal needs. 

We are driven by our commitment to help others. We are here. For you.

At this time, please contact us by telephone, website enquiry or email.
We’re here to help:

Leicester:
4 Dominus Way, Meridian Business Park, LE19 1RP           Tel: 0116 2121000

Wigston:
44 Long Street, Wigston, LE18 2AH                                              Tel: 0116 2121080

Market Harborough
Millers House, Roman Way,
Market Harborough, LE16 7PQ                                                        Tel: 01858 445480

Website:     www.lawson-west.co.uk

Email:           mail@lawson-west.co.uk

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