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Understanding a letter of advice

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Dear Henning

Following our earlier discussion, I understand that you would like to end the lease agreements with the current tenants of your business unit located at 11 Wide Alley 11, London N12. This should be done as quickly and inexpensively as possible, as you now wish to sell your properties and time is of the essence.

As discussed during our meeting, your tenants would be entitled to compensation should you choose to end the agreements without first giving notice. Under current regulations, the current occupants would be entitled to full compensation to cover inconvenience, loss of earnings, intangibles (such as loss of reputation) and any reasonable expenses that they might incur in finding alternative accommodation. You may reduce the amount of damages that such a termination would incur by providing an alternative and comparable unit in which the tenants could continue to carry out their business.

The contractual notice period is six months prior to the end of the calendar quarter. As you have just missed one calendar quarter the tenants are entitled to (almost) a further nine months under the current agreement. However, they may be willing to accept a reasonably generous compensation package in return for leaving the property earlier than anticipated under the contract.

I would suggest offering a compensation package based on the following terms:

– an initial notice period of two months, during which time both parties will endeavor to find a suitable alternative tenancy (although we must be clear that whether or not such a tenancy is found, the property must be cleared).

– the tenants be granted the final two months rent-free, although they will still be liable for any service charges, damages, cleaning costs etc.

– the tenants be provided compensation for reasonable expenses incurred as a result of the reduced notice period (ie fees incurred in arranging an alternative tenancy)

These terms are quite generous, and should be enough to deter the tenants from seeking any legal action aimed at preventing the premature termination of the tenancy. If you think that there would be a reasonable chance of the tenants accepting a less attractive package, I would be very pleased to discuss this with you further.

Please do contact me with your instructions at your earliest convenience.

Kind regards

Richard Stadt

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