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Renting Sheds

How do I safeguard renting Sheds and Yard space to other people for commercial uses.

I think that this Listener is concerned about is a Tenant remaining on after a fixed period of time and then becoming entitled to a long Lease by law.

The legal position is governed by Section 13 of the Landlord and Tenant Act 1980 which was amended by Section 3 of the Landlord and Tenant (Amendment) Act 1994.

If you rent a premises for business purposes and the tenancy extends beyond five years then the Tenant may be entitled to renew that tenancy for either thirty-five years or twenty years regardless of your needs.    If you intend to develop the entire property then the tenant is likely to be entitled to compensation and the Courts usually give very generous awards to Tenants being disturbed.

It is also important for you as Landlord to make sure that the Insurance position is clarified.   Usually what happens is that you oblige the Tenant to insure the property and public liability in the joint names of the Tenant and the Landlord.

Equally repairing covenants are important -  in the absence of a written agreement it is legally presumed that the Tenant is responsible for interior repairs of any property and exterior repairs are the responsibility of the Landlord.

Finally of vital importance is to ensure that your Planning position is legitimate because any breach of  Planning in an indictable offence (where charges can be heard by a Judge and jury in the Circuit Court).   

My advice to this Listener is that this is a commercial contract of multiple properties.   He/she should see their Solicitor to draw up Tenancy Agreements that will give the proper protection. Regarding the yard space it may be possible to use Licence Agreement rather than a Tenancy Agreement to allow for legal flexibility.

Equally the Tenant should consult their own Accountant regarding getting good Tax advice about the handling of the rent receipts including the possibility of V.A.T. on the Tenancy Agreements.    In this regard there are new rules regarding V.A.T. liability on the creation of Leases.

And regarding the Planning situation the Listener should talk to their architect.

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

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