Overcoming challenges

Joelson JD LLP reveal the ingredients for a successful outcome

With property in the capital at a premium and in high demand it pays to have the right advice to ensure a smooth transaction. Head of Property at Joelson JD LLP Philip Otvos and Property Solicitor Paul Sprague reveal how  keeping cool heads and finding practical solutions to problems ensured that a transaction that at times threatened to derail was ultimately brought to a satisfactory conclusion.

As a multi-service law firm, we were well placed to help our client deal with a range of issues and to provide advice, guidance, support and assurance from the moment the agreed commercial terms were received through to the opening of the restaurant and beyond.

Our client – a high-end sushi restaurant already established overseas with Michelin-star credentials – had spent several years looking for a site for a flagship London branch. With the help of an excellent agent a location in Soho was found and secured and we were instructed.

Given the prime site and huge demand for it, there was unsurprisingly pressure from the outset to complete the purchase of the lease in a very short space of time. However, following our initial review of the lease, we identified a number of issues that we advised our client would have to be addressed before completion. For example, the lease did not contain a right for the tenant to access the kitchen extraction ducting. Defects like this can be and often are remedied by varying the lease as a condition to completion of the sale/ purchase, although this requires the consent of both parties and also the landlord.

Unfortunately, in our case, the seller would not agree to the sale contract being made conditional and insisted on completing within the agreed time frame without varying the lease. We were however able to find an alternative and equally effective solution. This was on the back of our client’s application for landlord consent to its fitting out proposals. The proposals included new routes for ducting and the landlord agreed to document the required access rights in the Licence for Alterations. The transaction progressed and we exchanged and completed in accordance within the timeframe.

Following completion we usually attend to routine post completion formalities (such as paying any Stamp Duty Land Tax to HMRC and, where applicable, registering the transfer of the lease at the Land Registry) before closing our file. However, the news that squatters had broken into the property one afternoon came as a shock to both us and the client and meant the file had to stay open.

Following changes to the law in 2012, squatting in residential property is a criminal offence, but squatters occupying commercial property still enjoy protected rights. Our client, unfamiliar with the law in England and from a jurisdiction where the law supports property owners in such situations, found it difficult to comprehend the position it found itself in. Our experienced property litigation team stepped in and was able to advise the client and ensure that the squatters were removed and vacant possession of the premises obtained in a timely manner.

It was important to secure vacant possession as quickly as possible, so that our client could then begin its fitting out works and open the restaurant to the public as quickly as possible. The purchase of an existing lease does not entitle the purchasing tenant to a rent-free period, so it is key that fitting out works are commenced promptly so the period taken to complete the works and open to the public for business is kept to an absolute minimum.

The client also benefited from complimentary advice from a number of other Departments at Joelson Wilson. Our Corporate team advised our client in setting up a UK registered company; our Employment team assisted with various issues and our Licensing team ensured the existing premises licence was transferred to our client and varied to reflect the reconfigured layout of the Premises following completion of the fitting out works.

The restaurant opened earlier this year to rave reviews. Joelson Wilson’s reward was an invitation for our entire team to eat at the restaurant. The food was magnificent. The writer is pleased to confirm that the client was very happy with the result and that our file has now been closed.