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Status of Business lease after repossession

If the bank repossesses the commercial building I have leased, does my lease still have to be honoured? Thanks.

I am not sure from this listener’s question whether he or she is worried about their ability to continue in business or they actually want to get out of the lease but the answer depends on whether the landlord is an individual or a limited company.

 

If the landlord is an individual and the bank simply forecloses on the mortgage, then the bank is bound by the terms of the lease and must honour it.  If this listener wants to get out of the lease of course he or she can enter into negotiations with the bank about terminating the lease but if the bank aren’t interested, then the lease still stands.

 

If this listener’s landlord is a limited company and a liquidator is appointed, the liquidator may have the power to dishonour the lease.

 

My advice to this listener is that you should go to the solicitor who represented you when your lease was signed.  Bring with you a copy of the lease and your solicitor will read the landlord’s title and check out the position for you.

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

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