Once all the previous steps have been navigated, the lease and the MRO rental are now agreed and all that’s left is to legally complete the new MRO lease.
At this point you will need to instruct a solicitor to deal with this part of the process. We have partnered with a couple of firms and can recommend a suitably experience professional.
Given the fact that this process will involve winding up your existing lease in order to complete the new agreement, there are a few cost considerations:
- Paying off your existing trade account.
- Upfront rental – possibly 3 months’ if payable quarterly as proposed by the POB’s
- Deposit – you may require some additional deposit, depending on your current level and the MRO rental – usually to the sum of three months rent.
- Stamp Duty Land Tax (SDLT) – regrettably you may have to pay tax on the new lease, which can be calculated on the government’s website.
- Legal Fees – you will have to cover your own legal costs, and possibly the POB’s depending on what was agreed.
For most TPT’s these costs will run well into the thousands, so once again these costs must be reflected into the feasibility analysis conducted when first weighing up all the options.
Perhaps in the future, once the Deed of Variation (DOV) argument has been settled – some of these costs may be avoidable. However, as things stand they must be considered – which very much puts a MRO out of reach for some TPT’s who may be struggling – and ironically are in the greatest need of a FOT deal to improve profitability.
This is why it’s so important to seem some proper advice.
A commercial lease agreement in the form currently being adopted may not be the best route for every TPT. We can review your individual situation to advise the best way forward, in light of the Pubs Code in it’s current imperfect form.
There are also other considerations to weight up as outlined below.
DETERMINED MRO RENTAL APPEAL | DILAPIDATIONS ->