Occasionally business owners outsmart themselves when it comes to leases on their premises.\u00a0 We were recently asked to help in the selling of a retail business here on the Sunshine Coast that has been in the same location for many years.\u00a0 The lease had run its course and the business owner had chosen not to renew the lease.\u00a0 The landlord was agreeable to this, with the lease reverting to a \u2018monthly\u2019 tenancy.\u00a0 With a monthly tenancy, there is no security of tenure.\u00a0 Either party to the lease, either the landlord or the tenant can terminate with just 1 months notice.\u00a0 It gives the tenant the flexibility to be able to vacate within 30 days, but it makes the business very vulnerable.<\/p>\n
The business owner wanted to retire once the business had sold, but knowing that retail businesses were hard to sell, he wasn\u2019t prepared to commit to another 3 years in the shop.\u00a0 The business was a well branded franchise, with outlets all over Australia.\u00a0 With a sign in the window, \u2018Business for Sale\u2019, a buyer wandered into the shop to chat with the owner.\u00a0 After many meetings, the prospective buyer was told that the lease was only on a monthly basis, he quietly did some delving to establish the identity of the landlord.\u00a0 He also contacted the franchisor directly, to ask if any new franchises were available on the Sunshine Coast.\u00a0 The new tenant wasn\u2019t prepared to pay anything for the business, knowing the owner had no secure lease and consequently, had no business to sell, just a shop full of stock.\u00a0 The buyer then negotiated directly with the landlord, who agreed to a long lease of 5 years.\u00a0 And why wouldn\u2019t he!\u00a0 His existing tenant wasn\u2019t prepared to sign a new lease, so it made good sense.\u00a0 The landlord gave 30 days notice to the existing tenant, who was now in a really bad situation.\u00a0 He has a shop full of stock, but the new tenant only wanted certain items, not the whole shop full.\u00a0 The new tenant dealt directly with the franchisor, who was delighted to have a new franchisee happy to sign a long lease.\u00a0 The existing business owner now has no business to sell and a shop full of stock that he has to sell at a bargain price, just to get rid of it all.<\/p>\n
The moral of the story is that without a solid lease in place, any business is in a very shaky position.\u00a0 Landlords have no emotions: they don\u2019t care about a longstanding tenant who may have been paying rent loyally for many years.\u00a0 If there\u2019s no signed lease in place, it\u2019s \u201cAdios Amigo!\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Occasionally business owners outsmart themselves when it comes to leases on their premises.\u00a0 We were recently asked to help in the selling of a retail business here on the Sunshine Coast that has been in the same location for many years.\u00a0 The lease had run its course and the business owner had chosen not to […]<\/p>\n","protected":false},"author":1,"featured_media":838,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,19],"tags":[],"class_list":["post-833","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-news","entry","has-media"],"yoast_head":"\n