Legal news and advice from Adams Law

Commercial Lease Renewals Legal Advice

Do you have less than two years to run on your lease? Whose consents do you need if you are a sub-tenant, to renew?  What do you need to do if you are going to renew? Are you completely sure that you are secure under the ‘54 Act?

These are but a few of the Lease related issues you must consider and at the same time, run your business. We hope to give you some insights into these issues in future blogs.

Now let’s consider the first issue. Your lease is coming up for renewal and you have the right to renew under the 1954 Act; but, whose consents are required for the granting of the renewal? Will you need the agreement of the Superior and the Head Lessor?

If the Head Lessor’s lease ends before your renewal term ends – you will need the Superior Landlords consent. If the terms of your under-lease state specifically that you need the Superior Landlord’s consent, then you will need to get it. Note, if the terms of the renewal are substantially the same the Superior Landlord’s consent cannot be “unreasonably” withheld. Remember, the onus is on the Landlord to prove he has been reasonable.

Just a closing thought for this short piece; if asked to contract out of the protections of the ‘54 Act, to be valid this must be done before the lease is agreed or entered. I will write more on the form and effect of contracting out in later blog. But as ever, Adams wishes you success in your businesses and we are ready to solve any problem you may be having.

More on our commercial lease services.

Shareholders’ Agreements – Preventing Shareholder Disputes

Do you have a business setup with friends or family? Are you sure nothing can go wrong?

What will happen if one of you wants out?

A professionally drafted shareholders’ agreement may seem an unnecessary cost but it can save time and cost should things not go according to plan – for whatever reason, death, disagreement, wanting to exit and the like.

So what does a Shareholders’ Agreement do?

The agreement will:

  • set out the shareholders’ rights and obligations;
  • regulate the sale of shares in the company;
  • describe how the company is going to be run;
  • provide an element of protection for minority shareholders and the company; and
  • define how important decisions are to be made.

If you are a minority shareholder a negotiated shareholders’ agreement is essential to protect your rights being changed without your agreement.

As a majority shareholder the agreement is necessary to protect you from transfers of shares to parties not to your liking.

A shareholders’ agreement is even more necessary where there are no majority holders to regulate how decisions are made, most importantly, in situations where the parties don’t agree.

Though it is never too late, the best time to put a shareholders’ agreement in place is at the start of an enterprise. If this has not been done then we suggest you get one put in place as soon as you can – where there is a break down between you the other owners it is already too late.

The main elements to consider in a shareholders’ agreement are:

  • How and when to issue shares
  • When and to whom shares can be transferred – this is usually to give the other shareholders the right of first refusal and prevent unwanted parties joining
  • Protections for minority owners – including requiring certain decisions to be agreed by all shareholders.
  • How the company will be run – including appointing, removing and paying directors – which will be subject to a Directors’ contract ( which will include restrictions on directors other interests – such as competing with the company)
  • When to pay dividends
  • What to do to dissolve the company should the need arise

It is possible that the contents of the shareholders’ agreement may overlap with other company documents, particularly the articles of association and Directors Contracts.

We suggest you seek legal advice if you are not sure which provisions to include in which document and to ensure that the documents do not have any contradictory provisions.

What if you work for the business and you’re a shareholder? Do you need anything else? You should have a services contract that protects your rights.

Directors’ Service Contract

A Directors’ Service Contract will usually include:

  • An hours and place of work clause
  • Bonus or other reward scheme– and additional benefits.
  • Serious Sickness and Insurances
  • Termination and Garden Leave: –reasons for dismissal e.g. fraud, disrepute, bankruptcy etc
  • Right on Resignation – compensation etc.
  • Confidentiality clause and property protections
  • Restrictive Covenants
  • Director indemnity

What about the Articles then? Are they useful or necessary?

So what are Articles of Association?

Basically the articles of association determine the rules for running your company. They are the company’s governing document and give the rules for doing things like appointing and removing directors, making decisions, the rights and duties of shareholders and directors, etc

Most new companies use the standard Model articles issued by Companies House. What matters most is that the articles are consistent with the Shareholders’ Agreement.

The importance of obtaining freeholders consent

Are you thinking of carrying out alterations to your leasehold property? Do you believe the works to be so trivial that you can do them on your own accord? Well this is the school of thought that has resulted in numerous leaseholders experiencing severe problems in the long run.

The importance of obtaining freeholders consent is often overlooked and one that proves to have huge consequences. The majority of leases contain a clause which requires the leaseholder to obtain prior written consent from the freeholder before any alterations are done to the property, whether it be an extension, removal of a party wall or even changing the flooring. By failing to obtain the relevant consent leaseholders leave themselves susceptible to encountering problems when they go on to sell the property for a host of reasons.

For example;

  • If the internal layout of the property may not be synonymous with the lease plan
  • The freeholder may issue forfeiture of lease proceedings against the property
  • The Local Authority may take planning enforcement action.

All these consequences will result in

  • Discouraging potential buyers
  • Remedying breaches which are very costly and timely
  • Elongating timescales of your potential sale

In order to prevent you being an inadvertent victim call us and our team of expert lawyers will be more than happy to facilitate in perusing your lease and advising you accordingly.


The majority of property transactions complete without complications. However, completions can go wrong. Your mortgage monies may not arrive on time. Your new house keys may not be easily accessible on completion. Tenants may not leave the property, rubbish may be left on the property.

To ensure the transaction goes smoothly as possible it is highly recommended that you contact the conveyancing department at Adams Law. Extensive experience equipped with excellence Adams Law deliver the best results for their clients.

Use Adams Law today without delay to avoid delays and disasters!

FAMILY LAW – Form E error

It has recently been announced that many people could be paying too much in spousal or court order child maintenance payments, following an error on the electronic version of Form E.

The liabilities section at part 2.0 of the form wrongly calculated the total amount of liabilities that a party had, and therefore they may have been ordered to pay a sum of maintenance or provide a lump sum to their partners that was too high. Alternatively some parties debts may not have been calculated correctly when they were being awarded maintenance meaning that they have been paid too little. » Read more…

Protecting your Property from Fraud

In England and Wales, the Land Registry is the organisation responsible for maintaining the Land Register. The Land Register currently documents the title of more than 24 million properties. The title comprises the evidence of ownership and a record of conditions and restrictions regarding that ownership, including any mortgages secured on the property. Land registration is now compulsory when a previously unregistered property is transferred to a new owner, mortgaged, or when certain leases are granted. The ultimate aim is to have every property in England and Wales registered in the future.

» Read more…

Divorce & relationship breakdown

There is only one ground for divorce in the UK and that is on the basis of the “irretrievable break down of the marriage.” The Applicant must be able to prove that the marriage has broken down irretrievably based upon one of 5 “facts”. The Applicant must be able to prove that on the balance of probabilities that marriage has broken down irretrievably and one of the 5 facts has occurred. » Read more…

Judicial Separation

In some cases, the parties may feel that they do not want to seek a divorce in the first instance. Sometimes this is because the parties are not yet ready to formalise the divorce or dissolution or they have not yet been married for a year. In other cases, the parties prefer not to divorce for religious reasons. In such cases, a Judicial Separation may be of assistance to you. » Read more…

Pre or Post Nuptial Agreements

Pre-nuptial Agreements

Though many people do not like to think about what might happen in the event that their marriage or civil partnership fails at some point in the future, it can make a lot of sense to make plans for just such an event right from the outset. » Read more…

Financial Remedies

It is very often the case that before or during the course of a marriage or a civil partnership, the parties will have acquired assets either in their sole name or jointly with their spouse or civil partner. » Read more…