Business owners could be liable for payment of rent long after they have vacated a property. That’s the warning from Adams & Remers solicitors, following a recent court ruling.

The case of Newham v Van Staden has caused concern in legal circles because leases thought to be excluded from security of tenure provisions in the Landlord & Tenant Act 1954 might not in law be excluded afterall.

The new ruling means that anyone who was a former tenant of a lease could remain liable for a ‘holding over’ period long after the original tenancy has been assigned to a third party. Therefore the former tenant may think his responsibility has ended at the end of the original lease so what they believe to be excluded leases should be checked.

“This has widespread ramifications for any business owner that has owned a lease on their own or other properties,” says Robin Illingworth, managing partner at Adams & Remers. “Basically, they could now find themselves liable to rent payments many months or years after they have vacated a property.”

The Van Staden ruling also means that businesses who have not spelled out this potential liability in their records could find themselves liable for misleading accounts.

Illingworth commented: “Our advice, following this case, is that businesses should seek legal guidance as soon as possible to confirm whether the Van Staden decision applies to any leases which they have formerly owned and ‘were excluded’. Otherwise, they may have a nasty shock when they get a big demand for back payment of rent for a property they no longer have anything to do with.”