Category Archives: Legal News

Commercial Property Q&A

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I’ve received a commercial tenant’s application to assign a lease. I don’t like the sound of the proposed assignee can I simply ignore the request?

Statute prescribes that where landlord’s consent for an assignment is required a landlord must give consent unless it is unreasonable to do so and this must be done within a reasonable time. Case law has for several years suggested that reasonable time would be about 28 days however following a judgment in 2003 this could be as little as a week (if it would be unreasonable  to refuse consent). A property litigator can advise you as to whether you can properly withhold consent by considering the case law in light of the facts and checking the lease for whether there are any conditions to which Landlord’s consent to assign is subject.

I have an assured short hold tenancy. How much notice does my landlord have to give me to terminate occupation before issuing proceedings?

To end a short hold tenancy at the end of a fixed term using a section 21 notice,  2 months’ notice must be given on or before the end of the contractual term. The landlord cannot issue proceedings under section 21 until the fixed term is over.  If the AST has expired and now operates as a periodic tenancy at least 2 months must be given expiring on the last day of the tenancy. If the landlord serves a section 8 notice then there could be as little as no notice period, 14 days or 2 months depending on the grounds for termination cited.

I want to rent my commercial premises out but do not wish to grant the tenant rights offered by the Landlord and Tenant Act 1954 to remain in the Premises upon termination of the Lease. What can I do?

You can serve on the proposed tenant a notice in the prescribed form containing a health warning which explains that the tenant will not have the benefit of security of tenure once the lease ends. Crucially the notice must be served before the lease is granted but also before the tenant becomes contractually bound to enter it e.g. agreement for lease (but after lease terms are agreed).

Depending on the notice period the tenant must either then sign a declaration or swear a statutory declaration in the prescribed form, confirming that the tenant understands the significance of what s/he is signing. The new lease must refer to the service of the Notice; the Declaration and the agreement to exclude the provisions of sections 24-28 of the Act.

Commission Agreement

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A Commission Agreement is a legal agreement between two parties where an Introducer brings clients to a business. The relationship benefits both parties because the Introducer is paid a Commission for introducing clients and the business (Supplier) has the opportunity to increase sales. The agreement sets out how both parties will benefit from this arrangement.

A Commission Agreement is in some ways an agency agreement, where the Introducer is independent but acts on behalf of the Supplier. The Introducer cannot sign contracts on the Supplier’s behalf and does not sell their products or services. The relationship is purely about making the introduction and once this has happened the Supplier takes over the client relationship and makes the sale.

The Commission Agreement sets out the nature of the relationship between the Introducer and Supplier and clearly states the rights and obligations of both parties. Under this Commission Agreement the Introducer is only paid once the new client enters into a contract with the Supplier. It allows flexibility in how Commission will be calculated, which is generally based on the income that the Supplier receives from the new client during a specified period of time, known as the Introduction Period.

The Commission Agreement will cover introductions made when the agreement was in force even if the contract is later terminated. This means that Commission cannot be reneged on, which protects the Introducer. The Agreement also ensures that payments are only made to the Introducer on income that is actually received by the Supplier, which protects the Supplier in the event that they do not receive any or all of money due.

This Commission Agreement, written in plain English, provides for a complete statement of the limits of the Introducer’s authority and sets a boundary between the two parties so that the Supplier avoids any unexpected obligations under the arrangements. It also makes clear what the Introducer’s authority will be when marketing to potential clients, e.g. within a certain sector or geographical area. This avoids situations where the Introducer oversteps their authority and also prevents competition with the Supplier’s own sales or marketing initiatives.

The Commission Agreement contained in the business folder on our website protects Suppliers and ensures they are fully compliant with existing legislation, particularly with regards to non-competition, confidentiality and anti-bribery, all of which are essential these days in protecting Suppliers and ensuring compliance with the law, including the Bribery Act 2010.