The lockdown and its associated restrictions  have had a substantial impact on the economy and continue to do so. More tenants are unable to afford the rent for their commercial properties in the long term. Landlords are looking to let to more reliable tenants or choosing to use their commercial properties for alternative purposes, prompting a rise in the use of break clauses.

In this article Katie Briggs, Associate Solicitor in the Property Litigation Team at Wilkes looks at Break Clauses and some of the common factors both landlords and tenants should consider before serving one.

One of the main ways to end a commercial lease early is to exercise the break option. Break Clauses in commercial leases are extremely common. However, break notices can be a complex area of law, so it is vital to ensure they are correctly drafted and served. It is also important that you are aware of any conditions to ensure that the break is exercised correctly, the most common ones being the tenant giving up occupation and ensuring rent payments are up-to-date.

Case law has demonstrated that failing to adhere to covenants in the lease could deem the exercise of the break ineffective. Examples include the tenant’s failure to paint the property in the last year of the term (Bairstow Eves (Securities) Ltd v Ripley) and the tenant’s failure to provide vacant possession after removing the landlord’s fixtures and fittings (Capitol Park Leeds PLC v Global Radio Services Limited [2020]).

It is important for the tenant to be advised of his requirements under the lease to validly exercise the break clause and to ensure these are done before the break date. Failure to do so may render the break notice invalid. It is equally important for the landlord to be aware of these requirements to ensure the tenant meets these or the landlord could dispute the validity of the break option.

The first step is to review the lease. If there is a break clause, the relevant provisions need to be carefully reviewed and understood.  Not only is this necessary to comprehend the conditions required in exercising the break but it is also necessary to determine the deadline to serve the notice, who it must be served on and how it must be served.

It is important to ensure the notice is served on the correct people, using the correct method of service and in accordance with the break clause. An incorrectly served break notice may be deemed invalid. If there are managing agents for the property, it may also be worthwhile serving a copy on them, however this is to be done in addition to serving a copy on the landlord as opposed to in place of.

It is strongly advised to take independent legal advice upon receipt of a break notice. Not only is this important to determine whether the notice is valid but it can also be important to understand the implications of the break notice, both legally and practically. It will also prove beneficial if you wish to contest the notice and allows you to obtain advice in relation to not compromising your legal position.

Landlords and tenants should note that ending the lease does not prevent claims for failure to repair (dilapidations). You can read more on the topic of dilapidations here.

Whether you are the commercial landlord or the commercial tenant and whether you wish to serve a break notice or have received a break notice, The Property Litigation Team at The Wilkes Partnership Solicitors are able to assist you on all matters relating to break notices.

You can contact Katie Briggs on 0121 710 5839 or kbriggs@wilkes.co.uk. 

The Wilkes Corporate Team, led by Jeremy Parkin, have advised the owners of Birmingham based client LTS Global Solutions on the sale of their business to management.

LTS Global Solutions were established in 1999 as a transport operator offering clients services relating to logistics, transport and shipping.

The company currently employs 60 people at its Midlands HQ and plans to create a further six new jobs next year, when it anticipates taking on additional premises to handle new incoming contracts.

Leading the MBO team was current Managing Director Dave Hands and Mirza Baig, LTS’s Director of International Services.

Working alongside Jeremy on the deal was Mike Linford, Senior Associate in the Corporate Team.

When asked about the service received from Wilkes, Les Nunn, Founder of LTS said “Throughout the process I was put at ease by Jeremy Parkin and Mike Linford. I sincerely appreciated their responsiveness, knowledge and ability to deal with any issues that arose throughout this process. The way they conducted themselves was totally professional and I would have no hesitation in using them again or recommending their services to others. Complete satisfaction.

Commenting on the deal, Jeremy Parkin, Partner in the Corporate Team at Wilkes said: “Working with Les and his team was an absolute pleasure. Throughout the process Les had a clear idea of what he was looking to achieve from the business sale, which was a huge help in the negotiations. We wish Les all the best for his well-earned retirement.”

This is the latest in a growing line of M&A work for The Wilkes Partnership, following the completion of deals across a range of sectors including Financial Services, IT software, FMCG, events and health and social care.

For help and advice relating to your business get in touch with Jeremy Parkin on 0121 710 5931 or via email at jparkin@wilkes.co.uk.

The Wilkes Corporate Team, led by Kate Hackett, have advised long-standing client Clarkson Wayman Ball (CWB) on the formation of a new group, Radiant Financial Group (Radiant). CWB is one of the founding businesses within Radiant and its management team has also invested into the Group.

Radiant is a new, fresh consolidator of IFA businesses. Its objective is to bring together like-minded firms with a shared vision and values to deliver a truly holistic service to the market. Radiant will provide services to address the full spectrum of financial advice needs of companies, their owners and their employees as private individuals.

As part of the deal CWB Managing Director, Simon Cogman-Hellier, has taken up the role of CEO at Radiant Financial Group and will lead its growth strategy.

Joining Simon on the Board of Radiant are Peter Mann (Chairman), former CEO of Skandia and Vice Chairman at Old Mutual, James Cumming (CFO), former CFO of Complete Cover Group and Krys Wojnarowicz, former COO of CWB, now COO of Radiant.

Radiant has been established with the backing of Apiary Capital, which has invested in the group alongside existing management.

Working alongside Kate on the deal was Charlotte Lines, Solicitor in the Corporate Team.

Commenting on the deal, Kate Hackett, Partner in the Corporate Team at Wilkes said: “Myself and the team have always placed huge value on the relationship we have with Simon and the rest of the team at CWB. We were delighted to have been a part of the next stage of their journey. We will be watching their progress with interest and look forward to offering support and guidance to the business going forward.”

When asked about the support provided by Wilkes Simon Cogman-Hellier said: “We are very pleased to have established this new Group, with its focus on culture and client-centric service, and are thankful to the Wilkes team for all their support in the transaction. A great deal of work from everyone involved went into the launch and we are now excited to begin executing on our growth strategy.”

This is the latest in a growing line of M&A work for The Wilkes Partnership, following the completion of deals across a range of sectors including, Financial Services, IT software, FMCG, events and health and social care.

For help and advice relating to your business get in touch with Kate Hackett on 0121 710 5904 or via email at khackett@wilkes.co.uk.

 

The current coronavirus pandemic and continuous government restrictions have resulted in a widespread ‘work from home’ approach, limiting the need for office space and bringing an end to many commercial property leases.

Unfortunately, some commercial tenants have no option but to end their lease and vacate their premises as their business ceases trading.

The end of commercial leases has resulted in a rise of dilapidation claims. Dilapidations generally refer to disrepair to the premises relating to the tenant’s repairing obligations in the lease. These claims are often brought by the landlord against the tenant at the end of a lease. In light of the pandemic and the changes it has brought, landlords are increasingly bringing dilapidation claims and tenants are understandably concerned about their liability in relation to the amount of damages.

Whether you are a landlord or a tenant, the first course of action would be to double check the tenant’s repairing obligations under the lease. The landlord will need to ensure that any disrepair relates to these obligations. The tenant should double check their obligations and ensure they have complied with these. It would be beneficial for the tenant to check the lease terms prior to the end of the lease to ensure they have sufficient time to adhere to their covenants.

If the landlord brings a claim for dilapidations, the landlord will need to calculate the damages, which will involve instructing a surveyor to prepare a schedule to serve on the tenant. If the lease is still continuing at this time, it is important for the landlord to review the terms of the lease in relation to accessing the premises to ensure they do not breach their covenants and the tenant’s continuing right to quiet enjoyment.

The amount of damages the tenant is liable for in relation to the breach of their repair obligations will be limited under section 18 (1) of the Landlord and Tenant Act 1927. Damages are limited to take into account diminution in value and supersession.

  • Diminution in value relates to the amount by which the value of the landlord’s remaining interest is reduced by the breach. This considers the difference in the value of the premises when comparing the value of the premises in the condition required by the lease and the value of the premises in its actual condition. The amount of damages claimed cannot exceed the loss in the value of the property.
  • Supersession refers to the concept that damages should not be recovered for any improvement works or alterations a landlord intends to undertake, which would render the tenant’s repair work valueless. The tenant is responsible for proving that the landlord’s intention to undertake any work which amounts to an improvement and which goes beyond what the tenant is obliged to do would make the tenant’s repairs valueless and as such, no loss is suffered by those disrepairs.

Whether you are the commercial landlord or the commercial tenant, it is strongly advised that you obtain specialist legal advice in relation to dilapidations before the landlord brings a claim or before the tenant terminates the lease. In the current climate, the importance of doing so is amplified.

If you are a commercial landlord looking to bring a dilapidations claim or a commercial tenant who is concerned about their liability in relation to dilapidations, please contact Katie Briggs, Associate Solicitor in the Property Litigation Team at The Wilkes Partnership on 0121 233 4333 or kbriggs@wilkes.co.uk.

 

The Wilkes Corporate Team, led by Gareth O’Hara, have advised facilities management company SR Group on the Acquisition of CPL FM Ltd. CPL joins CDC Facilities Management Ltd (CDCfm) as part of the SR Group of companies.

The transaction was supported by £1m in funding from ThinCats, enabling the Midlands based SR Group to acquire Birmingham-based CPL, a leading facilities management company offering a range of integrated facilities management services.

Founded 15 years ago, CDCfm has unique experience installing and maintaining cleanrooms and close control environments within a wide range of market sectors and has a large presence in the facilities management market covering a range of sectors including retail.

Working alongside Gareth O’Hara, Senior Partner and Head of Corporate and Helen Smart, Solicitor in the Wilkes Corporate Team was Nick Johnson of Ryecroft Glenton, Newcastle.

Commenting on the deal Gareth said: “It’s always great to be able to advise strong local businesses and play a part in their growth aspirations. It was a pleasure working with the teams at CDCfm, Ryecroft Glenton and Thincats to get the deal done. It’s encouraging to see the SME market as buoyant as it is at present. Myself and the rest of the team at Wilkes are delighted to get another deal over the line.”

When asked about the support provided by Wilkes Carl Isakovic, Managing Director of SR Group commented – “We can’t speak highly enough of Gareth O’Hara, and Helen Smart of The Wilkes Partnership, they helped us through the acquisition/merger process with great professionalism and helped steer us through the many challenges that the year 2020 has given us all.” 

This is the latest in a growing line of M&A work for The Wilkes Partnership, following the completion of deals across a range of sectors including IT software, FMCG, events and health and social care.

For help and advice relating to your business get in touch with Gareth O’Hara on 0121 710 5904 or via email at gohara@wilkes.co.uk.

 

The Wilkes Corporate Team led by Jeremy Parkin, have advised GBB on a transformative investment of £20m by the £5.3bn Teesside Pension Fund.

Currently a ‘bank in waiting’, GBB expects to secure its provisional banking licence later this Autumn when it will trade as GB Bank and provide bespoke development finance to SME property developers in underserved regions across the UK.

The investment comes at a good time for GBB, which recently announced it will headquarter its operations in Middlesbrough. An initial team of 60, growing to 120, will be based in a new 11,000 sq ft space in the town’s purpose-built 2 Centre Square, Grade A office development.

Once formally up and running it expects to lend £385m in the North East to kick-start residential and commercial projects.

As GBB then expands across the North, Midlands and other parts of the UK, it aims to lend circa £3bn over 5 years building a £1bn-plus balance sheet. It will fund almost 20,000 homes and several million square feet of office space, along the way supporting the creation of well over 100,000 jobs.

Steve Deutsch, CEO of GBB, said: “This is a landmark moment in our journey. Middlesbrough has a reputation as a hotbed for digital tech innovation, making it a natural fit. 2 Centre Square is a hugely impressive building and will make a great base for the team.

The bank will meet a real need for SME commercial and residential property developers, as we’ll deliver the finance and relationship support that’s lacking at the moment.

Establishing a bank in the region benefits everyone, from the people we employ to the jobs created by the property developers we work with. We now have an excellent base, the investment that we need – the next stage is to secure our licence and have the full infrastructure in place ready to launch late 2021.”

Speaking about the investment, Jeremy Parkin, Partner in the Corporate Team at Wilkes said: “We were delighted to work with Steve Deutsch again and help GBB in financing its mobilisation plans. There is a great opportunity for GBB to capitalise on the gap in the market for funding SME builders and in turn to help address the chronic shortage of housing.”

When asked about the support provided by Wilkes Steve Deutsch said: “Working with the Wilkes team again was great.  They quickly grasped what needed to be done and, led by Jeremy Parkin, were able to help us smoothly conclude this important transaction, so that now we can push ahead with our plans to develop what will become GB Bank.”

Jeremy Parkin was supported by Gareth O’Hara, Mike Linford and Matt Hartas from the Wilkes Corporate Team.

For help and advice relating to your business get in touch with Jeremy Parkin on 0121 710 5931 or via email at jparkin@wilkes.co.uk.

Originally published in the Health Services Journal on September 16, 2020

The shortage of housing across the UK is a well-known fact; residential development is needed, and fast, particularly in the current economic climate. However, it is vital to ensure that the impact of these developments is properly mitigated in order to safeguard the healthcare service levels needed for local residents, as Leenamari Aantaa-Collier, Partner & Head of Planning at The Wilkes Partnership explains.

GPs and Acute & Community Services have been operating at full capacity for several years and with each development bringing an influx of new residents, the pressure is mounting on the NHS.

This flood of new patients will mean that NHS trusts and clinical commissioning groups will need to increase their workforce and potentially build new facilities in order to accommodate the demands placed on their services. It is this impact that new development brings which should be dealt with by way of a developer contribution.

Under the Town and Country Planning Act (Environmental Impact Assessment) Regulations 2017, for any new residential development over 150 houses, an expert with an understanding of the subject matter will need to consider whether there is a significant individual and cumulative impact on population and health.

It is therefore critical for NHS trusts and CCGs to be monitoring for new developments and engaging with their local councils early in the planning process to ensure a quick response to any applications.

Retaining the contributions

The initial attainment of the contributions aside, one of the major concerns should come from how to ensure the money is retained within the health services.

“The solution to this is to work with your legal advisor and local planning authority to provide flexibility within the initial mitigation request, whether this is in terms of timescales, projects or phased payments” explains Leenamari. “Should a situation arise where the initial proposed project is undeliverable for any reason, under an agreement which is too restrictive, the contribution will ultimately end up going back to the developers.”

“Secondly, I would advise the CCGs to seek security in terms of an agreement between the CCG practices and the GPs for any additional increase in facilities built using developer contributions. There is a risk that in the future these facilities may be sold and end up under alternative ownership, taking much needed infrastructure away from the health service. The sole purpose of these developer contributions is to provide essential health services and facilities for local communities, and it is vital that these are retained within public health indefinitely.”

“An effective and collaborative relationship with the local planning authority is key to successfully securing healthcare contributions, however, the planning system is complex, so it is vital that NHS trusts and CCGs seek independent professional advice to ensure all contribution requests are well evidenced in order to comply with the regulations. This way, we can ensure the future of our healthcare service is robust enough to withstand whatever the future may hold.”

To find out more about our work with NHS Trusts & Healthcare Providers please click here

For more information, please contact Leenamari Aantaa-Collier on 0121 710 5934 or at laantaa-collier@wilkes.co.uk

Charlotte Lines and Naomi Ramsay have joined Wilkes as newly qualified solicitors in the Corporate and Private Client Teams respectively.

Having first joined Wilkes as a trainee solicitor in 2018 Charlotte Lines joins our busy Corporate team and will advise clients on a wide range of corporate transactions including mergers and acquisitions, management buyouts, disposals, company reorganisations and share buy-backs.

Naomi joins the Private Client team having successfully completed her training contract at a local Birmingham based firm. Naomi will predominantly be working from our Solihull offices and will advise our clients across the full spectrum of private client services such as, Wills & Tax Planning, Trusts & Trust Administration, Court of Protection matters and Lasting Powers of Attorney.

Ellie Holland, Managing Partner at Wilkes said;

“2020 has been a challenging year for everyone and as a firm we are fortunate to be in a position where we are able to grow two of our core teams. We are delighted to be able to welcome Charlotte and Naomi to Wilkes and wish them every success as they develop their legal careers.”

“Both Charlotte and Naomi are talented young solicitors who have already demonstrated they are able to hit the ground running and I am sure they will prove themselves to be valuable assets to our firm.”


In this video Rick Smyth, Partner in the Corporate Team and Helen Smart, Solicitor in the Corporate & Commercial Team discuss the state of the corporate market and offer some useful insights for shareholders and directors.

If you have any questions in relation to any matter arising from this video update please contact rsmyth@wilkes.co.uk or hsmart@wilkes.co.uk.

As part of our COVID-19 Helpline & Resource Centre we are offering a no cost, no obligation, initial consultation to businesses and individuals affected by COVID-19. Please email helpline@wilkes.co.uk to take advantage of this offer or call us on 0121 733 4303.

As the UK starts to turn its attention to life after lockdown and businesses begin to reopen, the need to adhere to social distancing remains. For businesses to be able to comply with these measures more space will be needed. Proposals to encourage local authorities to close high streets and redirect traffic away from town centres have encountered opposition.

Leenamari Aantaa-Collier, Partner and Head of the Planning & Regulatory Team at Wilkes explores how these much-needed changes are set to impact towns and cities across the UK.

Current proposals aim to make social distancing easier and create more room for walking and cycling, as well as providing the extra space businesses need to continue trading. The challenge being that in our already crowded towns and cities the only additional space is on local roads, including high streets.

“Traffic Regulation Orders (TRO’s) are orders issued by local authorities allowing them to close roads and redirect traffic. The solution that the government has implemented has been to amend the current TRO procedure, streamlining the processes so councils can speedily apply TRO’s within a week of notification” says Leenamari.

“Traffic modelling, particularly in smaller towns and cities is complex, and the speed at which these orders can be issued will not allow adequate time for this. Therefore, traffic will be pushed into the surrounding residential areas creating increased congestion and problems for local businesses.

The safety of schoolchildren, the elderly and all vulnerable groups using narrow roads and pavements also needs to be considered. In some of the smaller towns around the West Midlands such as Kenilworth, Warwick and Knowle, these orders may not be practical at all.”

Leenamari continues: “Shopkeepers, food and hospitality businesses have been working hard to keep their businesses operating, many rely on large deliveries which will no longer be able to easily access business premises. Others who have moved to a click and collect service, and restaurants and pubs who have diversified to deliver food or become a takeaway, may have to close again if vehicles are banned from the High Street.”

Creating a balance

“Careful consideration needs to be given regarding the use of TRO’s to ensure they are not detrimental to local residents and businesses. If the traffic can’t get to the towns and cities due to poor traffic management, that could potentially be more detrimental for businesses and in turn the wider economy than the issue around lack of space.

Of course, safety needs to be paramount, but councils should look at creating a flexible hybrid solution which benefits all involved. This could be implementing temporary closures during busy times such as peak shopping hours and weekends, implementing a one-way system or using car parking space to create wider footpaths.”

If you require any advice on a Planning & Regulatory issue please contact Leenamari-Aantaa Collier on 0121 710 5934 or laantaa-collier@wilkes.co.uk.

In light of the current situation surrounding COVID-19 The Wilkes Partnership Solicitors are offering a complimentary, no obligation initial consultation designed to help you understand any issues facing you or your business and help you map out the best route forward.

To take advantage of this offer please call 0121 733 4303 or email helpline@wilkes.co.uk