Breaking an FRI lease

alan.oc

Hello,

There is a residential property on Daft for sale which is 10 yrs into a 30yr FRI lease. If I wanted to purchase the property and make it my ppr, what legal recourse would I have to break the contract. What is typically the norm in these situations please?

I've read the current contract and there are clauses for forfeiture e.g. not paying rent, inappropriate use of the property etc but I don't think the leasee has any intention of doing that - lease agreement is too favourable financially. Likewise I'm not in a position to invest.

It appears that the leasee is able to break it quite simply by paying up rent to certain date and ensuring the FIR part of the agreement is met.

Any advice is appreciated, thanks.

GerardKeating

https://www.boards.ie/discussion/2058370788/breaking-an-fri-lease

Every lease is different, the only clauses in the agreement can be used to break it. I assume there is nothing in the lease about owner selling.

The lack of ability to break the lease will factor into the purchase price .

CramCycle

I don't think anyone here can advise without seeing the lease but I would imagine little or nothing can be done, the house should be significantly cheaper for this reason.

alan.oc

Thanks for the responses. No, nothing in the clause about selling the property. And yes, starting prices are significantly cheaper but they are going to auction so always cheaper to start. Even still they are priced below the purchase price from 2017.

Can provide a copy of contract if it helps.

Lenar3556

It would be interesting to see it.
What kind of client is the lessee? Local authority / approved housing body type affair?

alan.oc

503175 (1).pdf

Attached now. Don't know who the lease holder is - a private individual in the right place at the right time it seems!

Lenar3556

I think that might need careful consideration. It’s a commercial property as presently operated.

It may be helpful to understand the nature of the company to which I note a liquidator has been appointed, and also establish the relationship if any between the company and the lessee.

Sometimes you will find these are connected parties and that would be important to fully understand.

alan.oc

Yes, got more legal documents and it does appear that the owners are going into receivership.

Not sure how I'll be able to establish the relationship between the company and the lessee though. I might reach out to the auctioneers and see if they'll know.

Marcusm

https://www.boards.ie/discussion/comment/122660181#Comment_122660181

so it’s a commercial premises (B&B) and an unsurprising 30 year lease. It’s an investment property, should you acquire it and want to occupy it as a family, it would probably require a change of use. Typically, other than default or clauses in the lease, a break would only be permittted to facilitate a complete redevelopment of the land - not just a change to a private house but a complete redevelopment. I’d love on if you are not looking for an investment property. The 60k rent would support a much greater capital value that 695k so it may very well go for more but not for private occupation.

alan.oc

Thanks for the advice. Yes at present we'd be looking for PPR but it does seem as though this idea would be complex to achieve, as 1. no idea on penalty for breaking the lease and 2. the subject property does require a change of use and 3. don't think there's a snowballs chance of redeveloping any of the above - certainly from my financial pov!

(There is another cheaper one but still, the same clauses all apply).