Shop tenant paying rent from Ltd company?

Reply to the comment left by Graham Bowcock at 16/01/2024 - 12:18
Crikey, meticulous documentation is a given these days. You can't leave anything to chance. No more the tenant seems a nice chap, I trust him. There are 'professional' tenants these days who know all the trick and turns and will exploit any landlord who gives an inch.

Reply to the comment left by GlanACC at 16/01/2024 - 13:34
I wholeheartedly agree with you, but we do property valuations in the secondary/tertiary sector and the absence of leases (decent or otherwise) is prevalent.

Far too many handshakes, or those relying on pub advice.

Thank you all very much for your points.

I have insisted that the rent is paid from whoever is on the lease and I agree I cannot understand why someone wouldn't propose the LTD company to be on the recent assignment in the first place.

Surely their Solicitor would have advised them of implications of both options? Just feels "off" and definitely don't want any hurdles down the track.

Speak to your solicitor.
My advice is to give your tenant notice to leave the property and more onto a new tenant.
Simple.

The issue isn't really who is paying the rent, but the risk of the tenancy being assigned.

Students are often tenants, but the rent is paid by parents. Even housing benefit tenants have their rent paid by the DSS but that doesn't make the UK government the tenant.

You said the lease had been assigned to family members but it isn't clear from the OP if that was done with landlord agreement and whether it is permitted in the lease (was it really an assignment of the lease or was it a surrender of one lease and grant of a new one).

If the company belongs to the family members, why would they not have put the lease in the company's name when it was transferred.

I assume you are still sending invoices to the individual (not the company).... Once the company is the tenant, your problem us if the company goes bust you have no claim against the individuals.

I think I would ask them why... How they account for the expense in the company accounts is their problem, you only need to ensure you don't lose security by allowing the company an implied tenancy and that coukd be covered by a personal guarantee from the family, or a written agreement between the parties confirming who is the actual tenant.

Reply to the comment left by Tim Peters at 20/01/2024 - 09:59
Thank you Tim.

Yes it was an assignment and only completed a matter of weeks ago with our consent and we also had to have bank consent as we recently refinanced the unit also.

I cannot understand why they wouldn't have asked for the Ltd Company to be on the assignment in the first place either. They did try to pay via this same Ltd Company around a year prior, when the previous tenant had the lease. This is why it feels off.

I sent them a letter saying that we will not accept the rent unless its from whoever is on the lease and in future it will be sent back and interest accrued until it comes from the correct tenant. Our Solicitor has now sent the same to their Solicitor.

Thanks Tim

Interesting thread and the reverse can occur where service charge due from leaseholders with share of freehold held in a resident owned incorporated limited company maintenance trust which acts on behalf of the Lessor and under separate covenant on behalf of individual Lessee, it appears the sc and gr and estate service charge has not been paid to the FRMC but to bank account using the same company title but without its CRN and not its registered office registered at Companies House. Apparently there is no bank account for the registered resident owned freehold man.company

Reply to the comment left by J C at 20/01/2024 - 08:33
That sounds a bit harsh. The tenant may well be performing very well apart from this issue which can be readily addressed. I wonder what grounds you think the tenant could be evicted?