26 Sep 18 by Dennis Venn
Early preparation enables easy exit.
European Springs were expanding and required larger premises. Following a management buy-out where the previous owners of the business were also the landlords the tenant had to return the building to it’s original condition to a date prior to the MBO. Reinstatement of the industrial premises to its original layout was required.
Initial review of the lease plans and Licence for Alteration identified that a number of partitions and reinforced concrete floors could be retained. The Landlord required these to be removed. Upon further analysis it was noted that removal of plant and equipment would leave the original partitions and reinforced concrete floors in poor repair, removal was more cost effective.
Following initial advice from Vickery Holman, European Springs undertook direct management of work. As matters progressed the need to be able to commence trading in their new premises required too many of the tenant resources and Vickery Holman took over completion of the works.
The Landlord had exacting requirements, clear advice was required for European Springs to understand the extent of work they were required to undertake to fulfil their Lease obligations in comparison to the Landlord’s demand/requirements. This enabled European Springs to understand their liabilities. In this instance they undertook slightly more work than required in order to assure compliance with their covenants in order to avoid lingering negotiations following termination of the lease thus enabling them to focus on their manufacturing business. Works costs £150,000 over an 8 month period of Vickery Holman involvement.
Early identification of the potential issues and engagement with the Landlord enable the extent of work, cost and timescale to be effectively managed and the property returned in appropriate compliance with the tenant’s covenants.