Bailiffs, Billboards, Breaking and Entering: Five Cautionary Tales of Landlord Encounters

Navigating Tenant and Landlord Dynamics: Essential Insights and Cautionary Tales

In this episode, we delve into common interactions between tenants and landlords focusing on legal premises, mutual cooperation and practical challenges. Highlights include the importance of understanding lease terms, managing unexpected landlord visits, and the potential complications of neighbour relationships. Five cautionary tales underscore the significance of clear communication and professional guidance: a landlord making unannounced visits, an air conditioning dispute, a disruptive 'for sale' sign, a neighbour growing exotic plants, and a bailiff mishap. This episode offers vital lessons for maintaining healthy tenant-landlord relationships, and underscores tenants’ legal and moral rights through their leases and legislation such as CRAR.

00:00 Introduction to Tenant-Landlord Interactions

01:08 Understanding Commercial Leases

02:07 Personal Relationships vs. Lease Terms

02:57 Consequences of Unannounced Visits

03:44 Neighbourly Disputes and Solutions

07:42 Unexpected Visits and Legal Rights

14:27 When the Bailiffs Arrive

18:27 Avoiding Bailiff Visits

21:50 Conclusion: Maintaining Good Tenant-Landlord Relationships

Learn more in these episodes:

CRAR: Commercial Rent Arrears Recovery
The Landlords and Tenants Act 1954
RTFL – Read the Lease

For support on landlords’ ledgers, lease agreements and more, go to www.smarterestates.co.uk 
 
 

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Transcript

0:00

Welcome to that Retail Property guy with your host, Gary Marshall. we delve into topics relating to estate management and accounts payable from the perspective of a retailer as tenant sharing stories and insights through Gary's unique lens. We hope you'll be entertained, enlightened, and may be a little inspired. In this episode, let's discuss some fairly common interactions between tenants and their landlords, or in some cases, the landlord's appointed agent. Let's start with the basic legal premise, but Elise usually grants exclusive use of an asset. To the tenant. This means that to all intents and purposes, it's now the tenant space. They can choose their opening hours, they can admit anyone they choose or deny entry as they wish. Whether that's barring a renowned local shoplifter, restricting group sizes for rowdy school kids or football fans on match day, or indeed not allowing the landlord to enter on a whim. Of course, the ongoing relationship between a tenant and their landlord does require a mutual cooperation, but a well constructed lease will actually spell this out. For the avoidance of doubt, it should detail the basis for a landlord or their agent or other representative to expect access to the premises. It might you even give a required minimum notice. Although often it is merely stated as being reasonable, and that can open a whole can of worms. Bear in mind here that we're talking about commercial leases, which grant exclusive possession rather than say a license or a concession or some space sharing arrangement, which by its very nature might have to be more relaxed, informal, and unclear. In some non-lease situations, a landlord might well be entitled to walk in and out as they feel. In most commercial leases of shop premises in a high street, a shopping center, a retail park, and so on, the tenant holds the keys both literally and figuratively. In these circumstances, it should be a given that the landlord shouldn't have their own key to let themselves in, and ultimately a tenant might be in a position to call the police against unlawful intruders for any landlord or their agent or representative who acts unreasonably. But that's not a watertight one size fits all. Rule circumstances, minds impact it, and a tenant should always read the lease to know where they stand. In many cases, the relationship between the tenant and the landlord can be amicable and personal. This is frequently true in neighborhood parades, village centers, and so on, where the tenant and the landlord are both independent, smaller businesses rather than big chains or corporate entities. But again, the personal nature of that relationship shouldn't supersede the terms of the lease. If the tenant is happy that their landlord is like a friendly neighbor who pops round, unannounced, and unexpectedly for a cup of tea and a chat, then oswell and good. But if that frequent visit develops into nuisance or triggers unwanted consequences, then the tenant should read their lease, know their legal rights, and be empowered to challenge the landlord. Starting of course, with a friendly request and then escalating as necessary to a more formal level. So what kind of consequences? Well, I've encountered circumstances where a landlord would appear from time to time, wander around the premises, and then start to hueing dictates about the state of repair, the way the premises were being used, even the range of goods on offer. The tenant endured this for a while, but then. Called on their lawyer to help remind the landlord that all of this was covered in the lease to desist. What constituted a nuisance if not harassment? And conversely, I've encountered circumstances where the tenant would constantly on the phone to the landlord requiring an immediate visit to discuss some small matter maybe affecting the shared yard or the flat upstairs. Both these extremes can become tiresome and a good lease. Should help manage expectations. In some cases, tenants might have a grievance about an adjoining tenant and reach out to the landlord for action, but then seem baffled when the landlord explains that they've got no control over those adjoining premises. Because I. While they technically own them as freeholders, they no longer have day-to-day rights over them because they've leased them to another tenant. These circumstances often require a different relationship between neighbors. I'm reminded of a time when I worked as an estate manager for a well-known pizza chain and many of their restaurants and takeaways were situated in neighborhood parades where the upper floors were let as residential flats. So the ground floor shops were on commercial leases. While the upper parts were on assured shorthold tendencies, the landlord retained very little actual control or liability in the structure. In one case, the residential tenants upstairs had a habit of letting the bath overflow resulting in water pouring through the ceiling into the kitchen area below. We quickly established that the landlord couldn't legally control this, but a quick neighborly chat and a veiled threat of claims for damages if it happened again, convinced the upstairs neighbor to pay more attention. I. In another case, during a particularly hot summer, a residential tenant grew tired and frustrated at being unable to sleep on a muggy hot London night due to the constant clunking and whirring of the air conditioning unit on the flat roof just outside their bedroom window. So. One night in an active frustration and desperation, they climbed outta the window onto that flat roof and poked a stick into the whirring fan. This burnt out the motor and so silence descended, although it was still a hot muggy night. The following morning, as we quickly established the flat roof area was part of the shop's demised space as retail tenants. We had full right to use it, and there were no statutory restrictions on installing aircon units. It wasn't a balcony for enjoyment by the occupants of the flat. It wasn't a fire escape route. In fact, just by walking on it, they were unlawfully, intruding, not quite breaking and entering, but entering and breaking. Now this aircon unit served the kitchen chiller cabinets in the pizza restaurant downstairs as the machine stopped working. The temperature rose and the pizza chefs arriving for shift the next morning found that none of the dough they had carefully prepared the day before and left to prove overnight had in fact risen. They were a pizza restaurant with no pizzas. Luckily, they were able to call in support from other nearby restaurants, but it had a major impact on business that day, and there was the cost of a new air con unit. But the next night, well, the heatwave continued. The air was still sultry, and you've guessed it, the residential neighbor did it again, same method, same result. Another broken air con unit. So in this case, the standard friendly word between neighbors escalated pretty quickly. It was clear they were not going to play nicely, but what to do in response? While the practical solution was twofold, quickly install a physical obstacle just outside the window to prevent it being used as a point of access to the roof. And as I mentioned, don't worry, it wasn't a fire escape route, but also to extend an olive branch by offering to install a cooler connected to that air conditioning unit mounted inside the residential flat. Okay. That was a cost, but that cost was negligible compared to the loss of product, lost sales and maintenance expenses, and it gave an instant result. The residential neighbors stopped tampering with the equipment immediately, whereas a litigation route might have cost more and taken longer. But I've digressed these neighborly matters and not tenants and landlord matters. The landlord in these cases wasn't in a legal position to do. Anything, but there are many cases where they are the responsible party and should act responsibly. I recall one instance many years ago while working as a state manager for next, receiving a call from a stressed out store manager. They were struggling to handle the demands of a delegation who'd turned up unannounced on behalf of the landlord and we're demanding access to all areas, including staff rooms and stock rooms. It was almost like a royal visit. The store manager couldn't quite understand who they were and why they were there. Only that one of the visitors was a contractor busy nailing a for sale board to the shop fascia and another visitor had told a store colleague that the premises were being sold. I. Of course, the in-store staff knew nothing about this, and in fact, neither did I, but it took only a few minutes to figure it out. I made a few calls and established the position The landlords of the property had decided to sell their interest known as the reversion. This means they were selling their right to collect the rent and to handle the negotiations at lease expiry coming up in a few years. The delegation of visitors were their appointed estate agent, the board contractor, and several parties who were interested in purchasing that reversion. They'd organized all of this without bothering to forewarn their tenant next. No arrangements had been made, no warnings had been given. To say the in-store staff was shocked was an understatement. These colleagues are ambassadors for the brand, supporting the customers driving profit at the sharp end of the business. They're not trained in property matters. It's really not their role to manage landlord relationships. That's what they have an estates department for, and a commercially savvy landlord should recognize that. Telling the staff that the building was going to be sold had immediately triggered a rush of panic. Was their future uncertain? Were they all gonna lose their jobs? What the landlord's agent hadn't told them was one critical fact that the building, or rather the investment in the building was being sold subject to the ongoing existing lease. The retail business would continue unaffected just with a different landlord, and this is fundamental. A landlord can't just get possession in the middle of a lease because they want to sell the building. The end position was clear. The landlord should have made some arrangements with the tenant via their head office, which was the legal address of the tenant written into the lease. We could have checked the lease, did in fact give the landlord to put up a for sale sign. Many leases don't allow this. Then we could have briefed the store colleagues forewarning that the business wouldn't be affected. Their jobs were safe. And the colleagues could have organized additional staff availability on the day to be able to escort this group around the building as they carried out their inspection. One other aspect of this is that for sale board, the contractor had physically installed it onto the shop fascia, which of course is an expensive piece of kit that belongs to the tenant, not to the landlord. They could at least have attached it to the landlord's brickwork above the fascia, but instead they caused damage that cost them dearly as we insisted that they pay for a replacement fascia sign, not a bo repair with a dab of silicon. Ultimately, they did attach an extra slip to the board with additional wording saying business not affected. It's a pity they didn't start the conversation with that point. And the legacy of that board rolled on during the time it was present outside the shop, acting more as an advert for the estate agent's business than as a beacon for Wouldbe landlords. It impacted sales. Customers would constantly ask the in-store team if the shop was closing down, and agents for other retailers would frequently call us in the mistaken belief that next was selling up a for sale board. Outside an active business is never a good thing for that business. So we recognize that visits should be organized well in advance and this can cause complications if the tenant doesn't have full control over all the premises demised to them in the lease. For example, if the lease demises additional space, which the tenant sublets, this could be a flat or an office upstairs or surplus sales space. Next door. Organizing a visit could mean liaising with multiple parties. The landlord, the main tenant, one or more subtenants. And some subtenants, especially residential subtenants, might not be home during the day and be nervous about leaving a key. So orchestrating this as a time slot, which is suitable for everyone can be a challenge. I recall one instance when working as a state manager for Sketch is a well-known dry cleaner back in the day where a colleague was struggling to make arrangements with a subtenant of some residential space above a shop in Ludburgh Grove. They had an assured shorthold tenancy. It allowed for inspections on reasonable notice. We were trying to make arrangements on behalf of the landlord, but it seemed no suggested appointment was ever convenient for the subtenant. This dragged on a while. It was becoming awkward and eventually we had to play a stronger hand, provide a legal letter and hint at consequences. So the subtenant eventually yielded and agreed a date for inspection. So all was well. That ended well, except afterwards, as we considered one bit of feedback. The landlord surveyor reported back that the subtenant had a remarkable crop of exotic plants. Perhaps they were orchids all thriving well in the warm space above the dry cleaners shop. Those big cleaning machines generated a fair amount of heat. We never got a chance to establish if those orchids were plants or perhaps weeds of some description. The subtenant quickly vacated the premises soon after. Organizing visits can be a nuisance for any administrator or a state manager. Juggling calls, offering reassurance to colleagues, ensuring that they have adequate staff availability on the day to escort the visitor, so not lead them to wander around unaccompanied, but not all visits by landlords or their representatives can be planned well in advance. Many leases contain a clause which overrides the reasonable notice provision in the case of emergencies. Of course, what constitutes an emergency isn't always clear, but experience and precedent tells us that it doesn't mean I forgot to organize or I was just in the area. It's amazing how many landlords or their agents seem to be in the area for an inspection on the Friday afternoon of a bank holiday. Weekend emergencies means emergencies like a burst pipe that's causing excessive damage for which repairs can't wait, but can only be fixed from within the tenant's premises. Or maybe an unforeseen structural issue, even if it should have been foreseen. But in any case, we're not entering the tenant's premises quickly will have an unreasonable impact for the landlord or a neighbor. And as we pursue the theme of visits from landlords, I suppose we should discuss the most unwanted a visit from a bailiff. This used to be a real shift in the power dynamic where the landlord held all the cards, but legislation has been introduced to protect a commercial tenant from a bailiff chasing rent. That said, it isn't unusual for a bailiff to turn up at a retail store, and we should discuss and understand their rights and powers. This next bit isn't a full legal explanation, just a few handy hints. Generally speaking, a bailiff can only dis strain for rent. The strain is the technical term for taking goods to clear a debt, and generally speaking, that debt must be rent, not service, charge, or insurance, et cetera. Some leases might specify that service charge and or insurance are treated as rent, which seems contradictory, but this phraseology means that the landlord can use a bailiff to dis strain for those charges as well as for the actual rent. There are other ways for a landlord to manipulate this. They might choose to allocate a payment of rent. Against older arrears of service charge. So effectively they clear the service charge and make out that the rent is in arrears so they can then dis strain for it. Sometimes this misallocation is unintentional. Other times it's a management process. They follow systematically. That's why's extremely important for commercial tenants to frequently check their landlords ledgers to ensure that all of their payments are being correctly allocated. Don't let them get away with it. Well, let's assume that for whatever reason there are arrears on the tenant's account, and those arrears are genuinely for rent. Can the landlord just send a bailiff? Well, that used to be the case, but most commercial leases are now protected by a process known as commercial rent, arrears recovery, and more simply referred to as kcra. In the most simple terms, this kcra legislation requires a landlord to give seven days notice of their intention to send in a bailiff. The wise tenant should then use those seven days. Wisely to either pay the charge or to adequately demonstrate that arrears are incorrect. Remember, maybe there's that allocation issue. Nobody wants a bailiff to turn up at the trading premises, making a big fuss in front of the customers, threatening to remove stock for sale at an auction. We've all seen episodes of can't pay, take it away. They explained quite clearly that the ticket price of the stock isn't relevant. It's a value. It's auction as a forced sale that counts. So a snazzy TV with a 500 pound ticket on the shelf in a shop might fetch only 50 quid at auction. And the bailiff needs to allow for this and might seize 10 tellies not one. And goods being seized isn't the only concern. It's commercially embarrassing to have the bailiff making a fuss in front of customers. This can impact the brand's reputation. It might even make the press, which is really poor publicity. And hard to defend in the court of public opinion, even if the landlord's claim is inaccurate, but putting it, basically, the seven day cry letter should give the tenant time to clear or resolve the claim of arrears and avoid the bailiff turning up. If a bailiff does turn up, perhaps due to some glitch in the administrative process of serving that seven day cry letter, then everyone gets pretty hot under the collar pretty quickly. Colleagues in store are not expected to handle this. They'd need support from their estates or accounts teams who should know what to do. There's pressure on the back office teams to rush a payment just to get the bailiff gone, whether the claim was right or not, and the tenant pays all the bailiff's fees on the top. So it isn't difficult to imagine an incorrect claim being made and paid and then perhaps never followed up leaving the tenant outta pocket. It's always better for the tenant to have greater oversight of how the landlord's credit controllers are handling incoming receipts. Get the ledger right, avoid confusion, avoid arrears, avoid a bailiff. But you might ask if the law requires the landlord to provide a seven day cry letter. So the tenant should have ample time to resolve the matter. How is it possible that a bailiff does in fact turn up? What could have gone wrong? Well, one obvious response is that the tenant simply hasn't dealt with it. It could be possible that the tenant's accounts team saw the letter but didn't recognize its legal status, so delayed dealing with it. It's possible that the arrears are recognized as an ongoing dispute, and the landlord failed to disin instruct the bailiff while this was negotiated. It's also possible that the seven day letter went somewhere else, for example, to a wrong address. One example of this stands out in my mind for a client with warehousing premises, a landlord seeking payments of some alleged arrears. Send a required seven day letter to the warehouse instead of to the registered office of the tenant, which is stated in the lease. Nobody in the back office function. Of estate management or accounts payable was in the slightest part, aware that a bailiff had been threatened. The team at the warehouse possibly saw the letter but had no idea what it meant or who to pass it to. The seven days passed, no payment was made, so a bailiff turned up, and then the local manager called the estates team who liaised directly with the bailiff. Now in this instance, the bailiff was polite and made a minimal fuss. They don't always, although clearly reserving the right to ramp that up if things didn't go to plan, but they didn't actually know what they were collecting. They knew how much, but not what it was for. They didn't have a breakdown showing rent for such and such a period. So it was impossible to check the records or demonstrate that the charges had already been paid and that the bailiff action was unwarranted. The bailiff waited a while, all the time. His costs were increasing, and finally the only practical conclusion was to pay him and follow up later with the landlord. But paying the bailiff was an issue. The bailiff wasn't set up as a known supplier in the tenant's payment system, and in any case, they weren't prepared to accept a bank transfer that could take a day or so to arrive credit card only. But finding someone on short notice with a company credit card with a wide enough limit to pay a six figure sum was a real challenge. So eventually, and as a notable act of good faith by the bailiff, it was agreed that he would take walking possession of all the stock in the premises. I. This technical term means he photographed and documented a load of easily identifiable stock and legally claimed it as his to be collected on another day. In the meanwhile, it was forbidden to sell it, move it, do anything to it. You can see why this requires a degree of trust by the bailiff, that the tenant won't just make the stuff vanish and then also disappear themselves overnight at the end of a stressful day. The bailiff drove away. The tenant had a legal undertaking to make the agreed payment within 24 hours, and the stock was effectively frozen. The bailiff earned a healthy commission, eventually those arrears were proven to be easily avoided. There'd been an administrative error that could have been corrected within seven days. The landlord had the good graze to recognize that the letter had not been sent to the appropriate office, but still wouldn't reimburse the bailiff fees. Seeing it as a lesson learned. So the relationship between tenant and landlord can rage between neighborly helpful, cooperative to challenging untrusting and sometimes downright difficult. You might feel that your relationship with your landlord needs therapy. It's always better to be on good terms than poor work on it. Be clear, and if circumstances arise, don't be hesitant about reaching out to a professional advisor with experience in this particular sector. Thank you for listening to that Retail Property guy. I hope you enjoyed today's discussion and found it both entertaining and insightful. Be sure to like, share and subscribe so you can never miss an episode. For more information, visit that retail property guy.com. Thanks again for tuning in.