If you have a landlord and a lease then you should read this warning carefully.
It comes from Shushila Hirani, who trades in Cherry Hinton, Cambridge, with a general convenience store and post office.
She took the lease on in 2005 for £16K. Five years came and went and the landlord did not notify her about any increase. Recently he told her he wanted 29K a year, backdated to 2009 ie an increase per annum of £13K. She staggered in shock to Citizens Advice, who said you need legal. She went to a lawyer in Cambridge who said there is no date mentioned in the lease, therefore the landlord can backdate the demand.
She went to a chartered surveyor who said the market value in 2009 was £26,500 so the landlord had undercharged her at £16K.
Funnily enough, when she argued with her landlord he reduced the demand down to an increase of £10.5K.
This means that her rent in 2009 should have been £26.5K, equating exactly to the amount her surveyor told her was the market value. It also means she owes £52K in backdated rent. Her landlord has told her she can pay in instalments and the surveyor says she should have asked the landlord sooner what the increase might be, rather than waiting.
I sent her to Barry Frost, a property specialist who runs Commercial Plus (Chester) and who is extremely knowledgeable on this subject. Barry told me it was one of the most extreme cases he had ever heard of, but it was now water under the bridge and down to negotiation.
“There should be joint responsibility, but the law is on his side. The lease takes precedence and if she isn’t careful (ie cannot pay) it could put her into default.”
Of course, next year Shushila’s lease is up again for renewal. Barry’s message is unequivocal: “If the landlord misses, you must ask. Even if he makes a verbal promise, get it in writing. The retailer should start negotiating three months before the lease is due for renewal, and preferably six months before it is due.”
I recommend anyone needing help on their negotiations to contact Barry on 01244 659101.