Shop tenant paying rent from Ltd company?

What does your Lease with original Leaseholder say about assignments?

Is the original Leaseholder still personally liable?

Does the LtdCo seem to be in good financial health?

It is much preferred if the rent comes from the named tenant.

We have a similar situation, where the named tenant owns a limited company and has now sold the company, but they have paid rent from the company.

We have requested that rent comes only from the named tenant, but also noted (in writing) that if rent is paid from a third party it does not imply any agreement with that party.

Make sure that all correspondence is with the named tenant. Do not correspond with any third party.

There is some danger of an implied tenancy, so if the matter persists and worries you then take legal advice. My simple view is that if there is a formal lease agreement in place, and all correspondence is correct, then it is more difficult to create an implied tenancy.

Implied terms in tenancy agreement are obligations the leaseholder and the landlord have which may not be set down in the agreement but which are given in law and implied in all tenancy agreements ie service charge contributions under provisions of the lease must be held LTA 1985 section 42 client trust bank account, section 19 service charges must be reasonable.
Tenancy agreement is between the named parties and not allowable by anyone else.
Why is this person getting another entity to pay? It’s a breach of contract and this payment listed on that company’s accounts as a contractor under that company’s legal contract for that reason is illegal and payment returned.

Can’t see any issue here. Its the contract that counts not where the payment comes from. For many years now I have paid personal bills from my LTD company, just have to make sure the payments went through as directors drawings (or similar). Whatever the LTD company who pays you puts it trough as is of no concern to you, they are merely paying you on behalf of someone (so its between them , their accountantant and HMRC).

You state ‘my limited company’ with a contract in your name.
Would you pay service charge under provisions of a lease to a flat held in legal title under the law of property act?
Service charge is not an imposed charge for a service. It is a contribution to landlords maintenance costs legally held separately in an escrow or trust account and vat exempt.
If another person pays who is not the named person who is the leaseholder then payment is not under the provisions of the lease a legally binding contract to the parties to it and invalid.

Reply to the comment left by Kizzie at 15/01/2024 – 17:57
The issue here is about rent, not service charges.

Reply to the comment left by GlanACC at 15/01/2024 – 16:50
The issue isn’t about how the tenant treats rent payments in their books, but the possibility of the limited company claiming an “implied tenancy” having paid the rent.

The landlord is right to be cautious about the tenant’s motives. If they want the limited company as tenant then they should take a lease in the name of the company (and then provide PGs in a personal capacity!).

It is not recommended to accept rent from the Limited Company – which is not the legal tenant who has the rental (and other) liabilities per the lease, nor was it referenced at the time the assignment was undertaken to establish its suitability and financial capability to pay the rent etc., so may have no money (and limited liability), so you could struggle to enforce lease terms including rent payment – and as others have said, you may create an implied tenancy, by which time, having accepted rent from the Ltd Co you have effectively ‘acquiesced in the breach’ (of contract).
If you had wanted to assign to the Ltd Co, you would have been well advised to obtain a personal guarantor, who has more to lose if the company fails and needs to get out of the lease.

Reply to the comment left by Graham Bowcock at 15/01/2024 – 20:42
I used to pay my son and daughters student accomodation from my LTD company, does that mean I have claimed it was an implied tenancy between student housing and my LTD company. Certainly not, its the CONTRACT that counts.

Reply to the comment left by GlanACC at 16/01/2024 – 10:48
Presumably yoiu had no intention of claiming an implied tenancy, but rest assured there are plenty of tenants who may have a go at it. The key word is claim – that doesn’t necessarily mean success. Agreed that a decent contract goes a long way to preventing claims (successful or otherwise), as does meticulous documentation generally, but many landlords are not that organized.