Purchasing Lease

Christine45

I'm in the process of contemplating purchasing a lease from a tenant who's going into liquidation.

Our solicitor will have to draft up new lease as previous one is advised against.

My question is is the current tenant in a position to sell lease taking into account that they are going into liquidation?

Thanks for any replies.

DoMyBooks

The liquidator should be selling the companies assets if their in liquidation not the company themselves.

Even if the company is not 'in liquidation' as yet but know its on the cards they shouldnt be selling assets.

Christine45

Thanks for taking the time to reply.

To give you some background on the situation - current lease holder is preparing to withdraw from lease and has informed landlord of their intentions.

Voluntary liquidation is pending. Lease holder is bankrupt and has nothing to sell except lease.
Interesting as lease holder has tried to sell us the lease directly.

antoinolachtnai

Are there any assets (like customer lists) which are of value to you from the other company?

If you buy a lease from an existing tenant (called 'assignment' of the lease) then you don't, in general, get to negotiate what terms are in the lease. You buy the lease as-is. If you deal with the landlord, you can negotiate.

If the liquidator can get someone to pay for the lease, then he may be able to stop the landlord giving a lease to you.

Christine45

Antoino, there are regular customers but not a guaranteed customer base.

The present tenant has nothing to sell except the lease but from what I've read that's also doubtful.

newman10

IMO do not buy the Lease because it is an extra cost that you have to incur is setting up your Business. Try to deal with the Landlord and get better terms. eg Free Rental period, Reduced Rent, Break Clause.

Why is the present Tenant closing

julies boy

the way retail is going i am serprised they are not just giving it away
you will probably find he has a persnal gearintie on it and will have to pay the rent if its vacent

Christine45

Thanks for all advise guys.

Newman, since my last post here I spoke to business owners in the area who told me that the present owners have quite a lot of debt and the money they were taking in just couldn't cover it. Also they haven't paid their rates in a long time. Nobody fully knows how they got themselves into this position. The landlord isn't happy with the liquidation process I'm new to all this so apologies if I'm going to come across silly but why would this concern the landlord?

Julies, yes your right - since speaking around I've been told that present tenant has a personal guarantee on it. Surely the liquidator can't help the tenant if such guarantee is in place??

newman10

Waht type of Retail are you considering ?

antoinolachtnai

The liquidator has to try to get maximum value for whatever the company owns. It's his legal obligation. He has to try to sell the lease.

Christine45

We have been advised by our solicitor to run a mile from this assignment. There are too many complications.

Newman, we proposed to sell imported goods from China i.e everything from stationary to household goods etc all at a low price.

Antoino, you are correct in what your saying. The present tenant tried to trick us into believing the liquidator would have no interest in the lease. They had told us that the lease had know value as it is soon up for review