exiting commercial lease & building consents

[pcq]

We are hoping to get out of our commercial lease. I have been trying to read about lessor breaches of contract but the act seems tofocus only on lessee breaches so can't find anything helpful yet. Our landlord is s builder and has built buildings on the property we are leasing. We have found that there are 3 buildings without building consents. The agreement is the standard Auckland institute one. Can we use this to get out of the lease?

[Boostin]

It will come down to a careful look at all the facts of the case. Specifically how/if the buildings interfere with your rights under the lease.

I would recommend speaking to your lawyer as soon as possible. It can become very expensive if you try to get out of the lease and are in the wrong. If you need a recommendation of a lawyer let us know what area you are in.

[John the builder]

does your building have approval?

is it ADLS lease? if so what edition?

[pcq]

It is ADLS 5th edition 2008. We have a few additional clauses added to this. One of which is a warranty that the premises are suitable for business use on the commencement of the lease, of which our lawyer says would have been breached. It is a health and safety issue and also would void any insurance claims if something were to happen so is a fairy serious issue. We have been discussing with our lawyers but are looking for further opinions on what our best plan of action is. They have questioned whether the breach is serious enough to warrant a cancellation.
I think what we want to do is get an independent inspection done next.

[John the builder]

they may be breaching the RMA (parking and site coverage etc) so premises may not now be approved for use. Were the other buildings there when lease started?

maybe go for a mediated settlement prior to cancellation where they agree to cancel and you dont go to council over unauthorised buildings

[pcq]

I doubt the RMA comes into effect. The main buildings are fine there are just additional buildings and alterations that do not have the building consents.

[Maccachic]

A building surveyor should be able to help you.

[John the builder]

I doubt the RMA comes into effect. The main buildings are fine there are just additional buildings and alterations that do not have the building consents.

they also have to comply with district plan (RMA) and site may not now due to unapproved work and this affects your rights now as well

[pcq]

yes our initial plan at the moment is to approach them and request a cancellation due to stress, etc , if refused we will bring this issue to their attention, along with a building report, which would prove the breach.

Or should we go straight to them with the report and request a cancellation?

My thoughts are that if we ask for a cancellation without claiming a breach then they'll try to get more payments out of us for allowing to cancel which we shouldn't have to pay due to the breach, and would then have to play the breach card anyway to avoid this, wheres if we pursue the breach first we avoid that and get straight to the point?

[pcq]

We have also talked to the citizens advice bureau today - their initial recommendation was to close the doors straight away to limit our risk if something were to happen but that is a bit extreme and we cannot afford the disruption to the business if there is no damages available for this. There more realistic recommendation was to not play it nice and to go straight to the point and to definitely inform the council regardless of the outcome.

[speights boy]

maybe go for a mediated settlement prior to cancellation where they agree to cancel and you dont go to council over unauthorised buildings

I wouldn't take this approach if it were me.
A safety, insurance, consent type issue should be reported IMO.

[pcq]

yes that is what the CAB said as well - also feel like we have a moral obligation to do so as if they don't fix it they'll keep using it as is and potentially be continuing to put other people in danger.

However, what if we go to the council and they find nothing wrong, then we're screwed and we've pissed off the landlords who will then probably make our lives hell. Is it enough just to not have the consents to get out of this or does there have to be something wrong with the buildings? This is the issue. There is definitely no consents and that should be a breach of the warranty clause that the buildings where suitable for business use - is this enough to cancel?

[Maccachic]

yes that is what the CAB said as well - also feel like we have a moral obligation to do so as if they don't fix it they'll keep using it as is and potentially be continuing to put other people in danger.

However, what if we go to the council and they find nothing wrong, then we're screwed and we've pissed off the landlords who will then probably make our lives hell. Is it enough just to not have the consents to get out of this or does there have to be something wrong with the buildings? This is the issue. There is definitely no consents and that should be a breach of the warranty clause that the buildings where suitable for business use - is this enough to cancel?

What quals/experience did the people at CAB have? In my experience they are volunteers that should point you in the right direction not provide legal advice, unless you are talking about community law service? Your best avenue is to speak to a lawyer experienced in commercial property - we (Prendos) are normally engaged in these types of disputes on advice of a lawyer (or by experienced tenants / or LLs (on the other side)).

[pcq]

We are already discussing with the lawyers but their replies are slow so trying to get different opinions so that I don't have to go back and forth with them so much.

[John the builder]

what is the health issue?