Seeking Advice for Termination of Commercial Lease - Can We Apply for Relief against Forfeiture?

Details:

My parents run a small family run restaurant and has been sent a notice of termination of their lease due to not remedying breaches. I'd like to find out if we can do anything like apply for relief against forfeiture.

  1. Landlord has sent two notices to remedy breach mid-late last year (my parents overseas at time, restaurant was closed)
  2. Landlord submitted notice of termination Dec 19 last year (gave 1 month to clear store, but my parents unaware and did not get to read letter when they returned as there was a lot of backlog to catch up on)
  3. Can we apply for a relief of forfeiture / or some other way to allow trading to continue at least til end of our lease in June 2018 (with option to extend 2 x 3 years).

We received the Notice to Remedy Breaches when my whole family, including myself was overseas at Canada at the time attending a sick family relative in hospital whose condition was deteriorating, so we could not have remedy the breaches and notice of termination as they were not aware they had been sent.

The breaches were in relation to:

  • Rent arrears / GST (which never amounted more than 1 month, but I believe my parents paid this but is usually on time or at most 8 days late for past 15 years)
  • Evidence of servicing fire safety equipment (our fault, but can easily be remedied)
  • Arrears from plumbing tax invoice dispute (I believed the landlord was responsible for the hot water system being broken, my parents called the property manager about the situation who then called a plumber on site who could not fix and said the whole unit needs to be replaced but charged my parents for a service call fee. My parents was unaware they would be charged a service fee and would have ordered their own plumber to replace and fix).

My parents was not aware of the remedy to breach and notice of termination when they returned from overseas and continued operating until we found out door lock was changed on 19 January 2018.

I wrote a letter to the landlord/owner requesting an appeal to retract the notice of termination and provide a solution which included:

  • Remedying all existing breaches
  • Paying for their lawyer fees for the notices
  • Ensuring that rent will be paid on time

They responded and this request was REFUSED.

My parents now has two weeks to remove all equipment and clear signage, stovetop, cold room and everything.

This will destroy my parents small business and livelihood who has been leasing and running the business at that premise for over 15 years.

Just seeing if it is possible to apply a relief of forfeiture and/or a way forward.

I understand my parents are in the wrong for not remedying the breaches and paying rent on time, but we like to make amends to ensure we can continue to the end of our lease June 2018 and sell the business before then.

We have two weeks to move everything out. Time is ticking.

I have also contacted some lawyer and referrals. But seeing if I can also get some free advice here :)

Need Help!

closed Comments

  • +5

    I understand my parents are in the wrong for not remedying the breaches and paying rent on time

    There's your answer

    Honestly, just from reading your side of events which would be biased in your favour, your folks don't sound like great tenants. No wonder they just want you out

    Thems the brakes.

    • As Spackbace says, this is fairly open and shut.

      Commercial leases are normally very explicit with regards to events of default, of which it seems your family had a few.

      For the future, Landlords are more likely to respond positively to proactive tenants who approach them with problems. Landlords are interested in keeping their rental income stable, and the ones I have dealt with would be happier to avoid a termination scenario.

      The short of it is that your parents and the landlord agreed on terms, those terms were breached and the landlord is exercising their rights under the Retail Leases Act (or non-NSW equivalent) and the Lease to protect themselves from financial loss.

      Unfortunately, unless the Landlord didn't serve the breach notices properly, calling any tenant representative will most likely result in your family being told that the Lease was cancelled legally, and to be frank, completely justifiably.

      Best of luck for the future, OP.

      Important note: It's probably best to get legal advice regarding Liquidated Damages that may be applicable depending on your Lease. In many of the commercial Leases I have reviewed, the Tenant is often liable for loss of rent and marketing expenses incurred by the Landlord as a result of the breach. If this is a factor in your Lease, your parents may need to pay the shortfall in the interim between finding tenants. Depending on where the shop is located, this could be as short as 1-2 months or may be as long as paying rent all the way up to the expiration of the "current term" at July 2018. Very important that you confirm this with a professional.

  • +2

    Too many excuses

  • +1

    Get proper legal advice. You need a very good property lawyer if there is any chance of salvaging this. You don't say what state you're from. The law applicable will vary between states. Whatever the case, act quickly. Something might be able to be made out of the service of the notices and whether or not the tenant was given fair notice of the foreshadowed termination. Whatever the case, it is going to cost a lot, and probably has considerable risk. You might want to consider whether you try to reach an agreement to pay a higher rent to re-instate a lease.

  • In Victoria contact Victorian Small Business Commission

    Other states may have something similar.

  • This guy is an acquaintance, which is to say I have met him, but have had no dealings with him to be able to form a recommendation, but he appears well regarded in this field. Anthony Herro

  • Are there any for lease shops nearby?

    Have a look; maybe your parents can move their stuff over there.

  • We decided to cut the loss. Legal fees are too high. Thanks for the help :)

  • Thread closed as OP has reached a decision.

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