We own a bookstore. We lease the premises. Some of the people in our block have received a notice from the landlord. Your lease has expired,it will not be renewed. He obviously has plans for our block. We need to check when our lease expires but we're very concerned.

What happens when you get a notice like this? Does it mean we lose our money?

Jen,

Usually when a lease is over, it is over. Check when yours ends. Let's say it ends in about a year. I would recommend that you and H find a new location. If it is available soon or on a time schedule you can handle, discuss leaving the lease early. Given that your landlord is not extending leases he/she may want to allow you to break the lease earlier or even pay you a bonus if you will leave early.

Normally, if you have a valid lease and have lived up to its requirements the landlord can do little to you, but then again you are living in NZ with different laws.

My recommendation: 1. Find your lease and find out when it expires.

2. Check with a lawyer.

3. If you two want to keep the business going, seek another location.

4. If you find one and it can work on your time scale see if landlord might be ameanable to paying you something to leave early or at the very least allow you two break lease with no cost or penalty to you.

Those are my thoughts.

God Bless,

JL

We really wouldn't want to do that. We are perfectly positioned on a main road in a tourist destination. It's a tourist destination because it is an old refurbished suburb with a lot of charm. It is a beautiful store. We have two floors with a big wide staircase in the centre.

Yes, the first thing to do is find out when the lease expires.

Thank you JL. I have a feeling that the laws in this sitch are pretty universal. We are really wondering what will happen to the money (we paid cash for the business). Are we just left with a bunch of books and no way to get our money back? If we can't sell the business as a going concern I just can't see what we'll do.

In reality we could move but finding another prime location like the one we have would be difficult.

Edited to add: B*st*ard landlords. LMAO

Buy the block and you become the landlord. Obviously he's either found a way to make more money than he does currently (prime location makes that likely) or he is retiring and wants the cash. Either way it is just a question of "how much?".

Make a business plan and take it to the bank for a loan and make the landlord a better offer.

Jen - you need to re-locate the business or you WILL lose all the good-will you have built up.

Thanks everyone for taking the time to reply to me. It means a lot. Our lease still has 6 years to run. Rob intends to retire at 65, which is 5 years away. It's made us think very carefully about what we need to do over the next 5 years to make sure we don't lose our money. We always intended to use it as part of our retirement fund.

Pio, we don't have the million+ $ we would need to buy the block. lol - nice idea though!

BigK, your reply brought me up with a start. We need to start protecting ourselves and planning NOW.

Your lease still has 6 years and I'm presuming no options. Be sure to read through the entire lease as there are often provisions about moving you to another location or ending the lease early based upon this or that. Also be sure to have your attorney read it and explain to you succinctly what you have to do in order to avoid being kicked out as a motivated landlord can find ways to get a tenant out.

However, if your landlord isn't renewing people this year he must have some plans in the works. Plans likely shorter than a 6 year horizon or he would have renewed them, at least, into annual leases. This "plan" is hot.

Since you want to retire in 5 years anyway...might be a good time to have a conversation with the landlord. He MAY be planning to pay you to get out as you may have one of the longer terms remaining on the block. This would be fortunate for you.

IF he wants to buy you out...although it may SEEM like you have him in a sling, still be reasonable as he's still in a very good position to make your next 6 years there a living nightmare (think construction and demolition all around you).

Another consideration...what's he going to DO to the neighborhood? They may be building something there that you could STAY in (or move in once it's built) and maybe YOUR business suits his interests whereas the others that are leaving do not. I've seen landlord's offer to hold the lease, pay a monthly stipend, and give you a opportunity to reserve your "chosen" premier space of similiar size and dimension in the new facility. This means you'll get 6 years under the current lease terms in the new building once it's done and ready to move into and a monthly stipend until then.

What a nightmare, but, at least you have more hope than the guys down the block.

Anyway...I've drafted and reviewed a lot of commercial space leases in my lifetime, so feel free to shoot me a question anytime.

Mr. Wondering

You've gotten good advice so far. Here's my 2 cents:

Don't talk to your landlord or anyone else who may pass your conversation on to the landlord until you've done the following things. You don't want to tip your hand to your landlord and allow him to act first.

Read your lease at least once through beginning to end and mark any passages you think might apply to your situation.

Talk to your lawyer about your options. You need a lawyer who is well-versed in commercial leases and one who would be willing to take an aggressive course of action (including litigation) should the circumstances warrant. You need someone who specializes in this area and not just someone who tells you they can handle it. You don't want a friend, you want an advocate. All lawyers have some familiarity with this type of thing, but just like you wouldn't go to a family doctor for brain surgery, you don't want to hire just any lawyer for something this important. Unfortunately, there are many lawyers who, when they need work, will take cases they have no business handling. Contact your local bar association. Seek referrals from people you trust.

If you're dealing with a sophisticated landlord or one who was well-represented by counsel when you entered into the lease, there are likely many ways for the landlord to break it early. If you were not represented by counsel at the time you entered the lease (which is way more common than you might imagine) the termination provisions could be unfavorable to you. With a good lawyer, however, there are always ways to improve your position.

Good luck!

Disclaimer: I'm a lawyer myself, although I have not actively practiced in this area.

Jen

My BIL is actually in a property related field and I asked him about NZ for you. He said in Aust and NZ the system is very very similar.

A commercial lease is NOT protected by a Residential Tenancies Act in NZ and all Aust States. In New Zealand, the Residential Tenancies Act covers the landlord-tenant relationship for residential properties only.

HOWEVER, some states in the east have brought in Commercial Tenancies Acts that do give some protection. NZ is covered by the Property Law Act 2007

you can get a copy here he tells me

www.legislation.govt.nz/act/public/2007/0091/5.0/096be8ed800feb2b.pdf


If a lease grants a tenant a right of renewal then a tenant can seek a Court to force the landlord to accept that renewal. This applies even where the tenant is in breach or has not met agreed pre-conditions however it is a situation where the Court has a wide discretion as to the orders it will make which will likely be fact specific (Property Law Act 2007, sections 261-264).

The key is the terms of your Lease and what it actually says, he suggests you go to someone like PhillipsFox in NZ who are lease and property experts if you have no one yourself. But its costs.

He also says there is nothing that can force a owner to agree to transfer a lease to a new party... e.g you sell the business on... UNLESS there is a specific term in the lease permitting this. It may be a good long term plan to look for options in or near the same area if the 6 years looks shaky. .

Thank you SO much everyone. This all really helps. We've realised that we need to something about all this now. No one is going to buy a business in 5 years when the lease is about to expire. We're seriously considering looking for other premises very soon. Yes, we will read the lease from top to bottom and get proper legal advice.

The rumours are that the landlord wants to put in "modern" shops. He'll have a fight on his hands. The charm of where we are situated is it's old buildings and the historical value of those buildings. Our store fits in very well with the whole area.

Not for the first time, I wish my father was still alive. He was a property lawyer.