Landlords, Can You Have

Too Good An Industrial Tenant?


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Too good a tenant

We were recently dealing with a landlord who complained that he had too good a tenant, who over the years he had allowed to take up more and more of his retail units in a small local shopping precinct to the point where the corner shop (which had become the everything shop) took up seven of the nine units. He was concerned that the business owner may move on and it loses income stream. Upon further investigation it was discovered that each of the seven units had been let individually at a different time, so for the existing tenant to move he would have to gradually give back each of the leases, with the outer ones first, otherwise he would end up with a shop that was split.

Too good an industrial tenant

Industrial estates tend to take on a life of their own. They are smaller units with a dozen to two dozen units to let on a large industrial estate. The problem can occur on the smaller industrial estates where a good tenant is not easy to find and tend to be dealing with a poorer tenant. When the landlord does get a good tenant he tends to do almost anything to keep them. This could involve the tenant taking on adjoining units and knocking through between units to use them as one larger unit, or it could involve the landlord issuing licenses to use units on a more short term basis.

The issue that we had come across is where an industrial estate of twenty odd units in a poorer location, always having two or three units empty, had relied very heavily on the most successful small business entrepreneur in the units, who had over time taken on five units in total. When they came to move on and reorganise their business to a larger property this left the landlord with a further five units empty. Together with the typical/traditional two or three he had nearly half the industrial estate empty, which isn't appealing to newcomers to the industrial estate and certainly isn't appealing to the landlord's cashflow and of course he has got the possibility of a dilapidations claim. Dilaps claims do not equal cashflow and are a one off payment, which can take some time to negotiate.

If you need help and advice with regard to leases, dilapidations, schedules of condition, dilaps claims, scott schedules building surveys, structural reports, engineers reports, specific defects report, structural surveys, home buyers reports or any other property matter please call 0800 298 5424 for a friendly chat. Please note we are independent surveyors.

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We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).

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Back to our main menu on Dilapidations

Dilapidations for Landlords and Investors including an example of a Scotts Schedule

Dilaps Claim by a Landlord

Landlord's View on a New Business Taking on a Lease

What the Landlord wants in a Tenant

Landlords, can you have too good a tenant?

Landlords What do they Look For in an Investment Property?

Landlords What do they Look for in Industrial Properties?