Commercial Case Studies
Case Study: Substation Lease
Commercial Property Solicitor
Howells Solicitors were instructed by Moulded Foams, the largest independent cellular foam moulder and designer in the UK.
The instruction related to Western Power’s request to Moulded Foams for a lease of the electricity substation site situated on freehold land in Blackwood owned by Moulded Foams.
Upon receipt of the substation lease from the lawyers acting for Western Power, Howells quickly identified that there were no rights reserved over the site for the benefit of Moulded Foams, there were no ‘lift and shift’/ relocation provisions and there were no obligations on Western Power regarding health and safety hazards.
Whilst Moulded Foams were not overly concerned about the land; this was fenced off and they actually did not realise that this land was included within their freehold title, it was important for Howells to incorporate these provisions emphasising that this lease was a 99 year lease and Moulded Foams’ circumstances may change in the foreseeable future.
Howells successfully negotiated with Western Power’s lawyers, (Geldards) the following rights for the benefit of Moulded Foams;
(a) a right to light, support and protection; this is important to ensure that the substation doesn’t have a detrimental effect on the land of Moulded Foams
(b) a right to use and connect into service media at the substation site; this is important for electricity supply, water, and other utilities flowing to Moulded Foams
(c) a right to develop ;this is important to allow for future development of Moulded Foam’s land - if this is not expressly granted this right may not be exercised in the future.
The power for Moulded Foams to relocate the substation was also successfully included by Howells. Whilst Moulded Foams did not have any plans to develop their factory site at this stage, these provisions will allow Moulded Foams to serve notice on Western Power to relocate the substation should Moulded Foams obtain planning permission for future development.
Howells identified that environmental provisions were not included governing the use of the substation. Whilst the electricity provider is governed by various statutes regarding the use, a provision allowing Moulded Foams to forfeit the lease by applying to the court should Western Power do/omit to do something which causes a health and safety hazard was successfully negotiated.
This case highlights the importance of seeking legal advice in relation to substation leases. They are often heavily weighted in favour of the electricity provider and whilst they are reluctant to amend their standard leases and often have a stronger bargaining power, it is important to ensure that the terms contained in the lease are reasonable. After fairly extensive negotiation the lease was concluded.
Case Study: Purchasing a Business
Andrew Davies - Chiropractor
Howells Solicitors were instructed by Andrew in connection with his start up business as a chiropractor.
Having found suitable premises Andrew asked Howells to advise him on the proposed lease and to investigate the landlord’s title to the Property.
Howells quickly established that the property did not have the requisite planning permission consent for his proposed use contrary to the advice that Andrew was receiving from the letting agent and the landlord. To help expedite matters Andrew submitted a planning application whilst the terms of the lease were being negotiated and agreed between Howells and the landlord’s solicitors.
‘If Howells hadn’t identified the need for planning then I could have been prevented from trading shortly after opening which would have put me and the business under considerable financial pressure.’
The case highlights the importance of seeking legal advice when taking on a lease of commercial premises. There are factors to consider beyond the terms of the lease. Leases will often contain a disclaimer from the landlord that they give no warranty that the property can be used for the purpose which the tenant is intending to use the property for. Once the lease has been signed there is usually no way for the tenant to bring the lease to an end early so the tenant could find themselves being unable to run their business but still responsible for the rent.
15 King's Road,
Cardiff CF11 9BZ
Tel: 029 2115 9435
Steve & Kim Dyer – Coffee Shop Owners
Having decided to retire from their job of more than 20 years both Steve and Kim had the dream of opening up their own coffee shop. They had found a business that they wished to take over but shortly after commencing the due diligence process, Howells established that the information that had been supplied by the sellers did not accord with the premises or the business when it was viewed.
The sellers did not have the consent of their landlord or the Council to place tables and chairs outside the premises on the adopted pavement.
‘If Howells hadn’t been so diligent in their investigations then matters could have gone horribly wrong for us. The outside covers contributed a significant amount to the turnover of the business and without them the business would not have been profitable.’
47 Cardiff Road,
Caerphilly CF83 1FP
Tel: 029 2088 8595
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