Landlord doubling Rent - no lease in place...??

[GalwayGuy]

A question about business leases or the lack there of......

We are running a small business for 7 years from an commercial premises. We have never had a lease on the property we rent.

We were always were a bit uneasy about this situation but to be honest it suited us when we were setting up. When we were setting up the landlord never asked us to sign a lease - we never chased him on it. Taking those first few steps as a new business all those years ago seem a bit less stressful without a long term lease hanging over us.

We've been perfect tenants. In fact we have renovated the premises out of our own pockets.

Of course things have changed - 7 years on, the business is doing quite nicely and is providing a good solid income.

We have been informed that our landlord now wants to almost double our rent from 13k per annum to 25k per annum. Of course this increase comes with a very long lease!

For where we are and what we rent, we would consider this is outlandish increase (is this acceptable at any level of business??). We consider this an act of extortion - and have our suspicion's that they are trying to get rid of us.

Can anyone offer advice on our situation?
Are commercial landlords allowed to just double rent?
Is there a way that rent increases are controlled?
Any comments about where we stand without a lease?

Any help greatly appreciated!!

 

[Brendan Burgess]

I don't think that the absence of a lease is particularly relevant here. Put it another way, if you had a lease it would have been for 4 years and 9 months and so he would have upped the rent 2 years ago and issued you a new lease.

There is only one question here - Is 25k a fair rent for the premises? If 13k was fair 7 years ago, I would think that rents doubling in 7 years is about right. It's certainly not far off.

Look at it another way, he could have reviewed the rent at any stage over the past 7 years.

I am not a legal expert, but my understanding of the law is that you have a right to a long term tenancy at market rent as you have occupied the premises for more than 5 years. If you can't agree a rent, you can get arbitrators to set it for you.

I think, but I am not sure, that you can say what length of lease you want. In other words, you can opt for a 5 year lease. You do not have to sign a 21 year lease.

 

[mercman]

I must only assume that you are based in Galway ?? Brendan has answered it fairly clearly. The easiest thing to do in the first instance is to check what should be the current rent. Are you presently paying Rates and Insurance ?? Do you know your neighbours ? - if they are renting they should be able to tell you what they are paying. If the landlord wants you out, there may be a good reason for you to stay. And if it is a good enough reason he will have to buy you out of your lease as the new law has not beingd passed in th Dail yet, so you could stay there forever as long as you conform to the lease that you are given. And if you are based in Galway, be careful because Chinese Whispers just might get back to your landlord.

 

[MrMan]

You should approach a commercial agent to act on your behalf and to negotiate a lease that suits your needs, things like when your next rent review is, the length of overall lease, whats covered in payment(insurance inside & out repairs etc) they will also try and negotiate the return of your own input into the premises even though its doubtful that you could recoup that if you did it without landlords permission. It is unusual in this day and age for a commercial letting to be in place for so long without a lease, you should welcome it because it protects you aswell.