Commercial unit inspection where the tenant sublets without consent
You are instructed to inspect a small retail unit let on a five-year commercial lease to a tenant who runs a café. During your visit you notice the unit is now trading as a different business name, the fit-out has changed (a new counter and extraction system), and a staff member says the original tenant 'rented it to someone else' about four months ago. The lease contains an alienation clause requiring landlord's consent for assignment or subletting, and a clause requiring consent for alterations. The landlord has received no consent requests. The unit's use class and planning position are not clear from the file, and the extraction system discharges near a neighbouring flat.
1. What should you record and report, and what should you avoid concluding?
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Record factually: the trading name observed, the staff member's statement (attributed, not adopted as fact), the physical changes to the fit-out with photographs, and the absence of any consent documentation on file. Do not conclude that the lease has been breached or that the occupier is unauthorised - that is a legal question for the landlord. Flag the issues for the landlord: possible subletting/assignment without consent, alterations without consent, unclear planning/use position, and the extraction discharge near a neighbouring flat (possible nuisance or planning issue). Recommend the landlord take legal advice and check the lease terms and any superior lease.
2. The landlord asks whether they can 'just forfeit' the lease. How do you respond?
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Explain that forfeiture is a serious legal remedy with strict procedural requirements and risks; it is not a decision for an inventory clerk or managing agent to make or advise on definitively. The landlord should take legal advice on whether the alleged breaches are established, whether the lease permits forfeiture, and what notices and steps are required. Warn about the risks of wrongful forfeiture (damages, reinstatement, tenant claims) and about the impact on rent and the investment. Your role is to provide the factual inspection report and documents; the legal strategy belongs to the landlord's solicitor.
3. What follow-up checks would you recommend before the landlord acts?
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Recommend: (1) obtain the full lease and any side letters to confirm the alienation and alterations clauses; (2) check the planning use class and whether the current use is lawful; (3) check the extraction system's compliance and any nuisance risk to the neighbouring flat; (4) request copies of any subtenancy or licence and the identity of the occupier; (5) confirm insurance position given the change of use; (6) review service charge and rent records. Document each request and response. This evidence base lets the landlord's solicitor advise properly and protects you from being asked to act on incomplete facts.