Contract Clause help

I currently run a private function venue / offices and today i'm going to find out if i will be acquiring another one. ( Leasing the building)

Now the only thing which is worrying me is, what if i spend a couple of years building up the business and then the guy who owns the building decides he wants the building back and to turn it into the same business i run? Due to the nature of the business if he did take the building back then he would acquire all of my customers as most of them are long term bookings who rent office space or hire a room on set days.

This means I would have wasted a lot of my time and money and he could just step into a ready made profitable business! Is there a clause i could put in the contract saying he agrees not to use any of my customers if he decides to not renew the lease or some similar agreement?

Thanks.

Talk to a solicitor but I doubt you can prevent that scenario.

Set a depreciation cost for the improvements made in that building. If the improvements depreciate over 5 years, sign a 5 year contract.

Get a longer lease.

I very much doubt you can put a clause in to get him not to rent his offices out as offices

Solicitor. They may recommend a compensation package after leaving to cover the efforts you have put in.

If you ae so worried why not go elsewhere?

theleg said:

Get a longer lease.

I very much doubt you can put a clause in to get him not to rent his offices out as offices

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This

Our shop often deal with this on and off. Longer lease is the only way really.

IANAL - but could you get something written in that would allow you a commission / finders fee for any tenants that remained the building if he took the building back after your lease ended?

Longer lease with tenant only break clause on the day before the 5th anniversary of the term commencement date exercisable on at least 6 months notice - only conditional on payment of principal rent (nothing else). Make sure you have a clause for refund of payments of rent made in respect of the period after the break.

They are bound to want a rent review though....

Just speak to a solicitor (you pay for what you get...).

theleg said:

Get a longer lease.

I very much doubt you can put a clause in to get him not to rent his offices out as offices

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It's not so much that i don't want him to rent his offices out. Its that i want him to find his own customers and not the ones which have cost me time and money in finding. I suppose when he gives me notice i could also tell my customers that we are closing so they leave the venue and he will only have a empty building.

sanaxe1 said:

It's not so much that i don't want him to rent his offices out. Its that i want him to find his own customers and not the ones which have cost me time and money in finding. I suppose when he gives me notice i could also tell my customers that we are closing so they leave the venue and he will only have a empty building.

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I would expect thats down to the customers themselves rather than the landlord.

After a year, you will have security of tenure anyway, and its relatively hard to get rid of you after that. Just make sure the lease is covered by the appropriate parts of the landlord and tenant act 1954.

If you are renting his unit to divide and sublet it, i dont think you will have much ground to dispute him doing similar, if indeed he ever would.

If your lease ends, then inform your customers you are moving elsewhere, dont bad mouth the owner.

If they go there because you earned them, then they will follow you but if they go there due to convenience of location, then the owner should be able to gain those customers if he takes the initiative to fulfil their needs after you leave.

There is being protective of your business and then there is being spiteful. If you take up a long term lease, then at least he has the security of a long term tenant and you have the security of a long term lease. He could not and would not feel the need to change his method of income.

Thanks everyone. I will try to get a long term lease when i speak with him later today.

Make sure the lease you sign doesn't contract out of the Landlord and Tenant Act 1954. And if this is a significant business for you, go and see a decent solicitor.