Network Rail’s ‘arch businesses’ should check their lease without delay
Thousands of small businesses fear they will be left without their livelihoods as Network Rail is set to sell some 4,000 of its 5,500 arches around the country by the end of this year.
"Of course, I can understand why people are concerned. As well as established businesses that have been there for years, many railway arches house young start-ups. "
But since announcing they would be selling their commercial property business, Network Rail has been accused of trying to strong-arm many of them out of their arches with threats of eviction if rent increases of between 300% and 500% are not met. With the arches’ value marketed at over £1bn, there is a chance this is set to increase, with fears about what will happen to the businesses when the sale goes through, with private equity firms clamouring to acquire the vast block of real estate.
Alison Rocca, Commercial Litigation Solicitor at Manchester based Glaisyers Solicitors LLP, who has several clients with businesses based in railway arches, says the first thing people should do is check their lease:
“Of course, I can understand why people are concerned. As well as established businesses that have been there for years, many railway arches house young start-ups who have actively sought out these premises precisely because the rates were low, and they may not be able to afford premises elsewhere. However, the first thing tenants need to remember is that they do have rights. So before agreeing to any hikes in rent, or demands to leave their premises, people must check the terms of their lease or tenancy agreement because they may find out that actually, they don’t need to meet them. From experience the leases I have had sight of are assignable and therefore any sale by Network Rail will be subject to Lease. Commercial tenants also have statutory rights which sit alongside their leases which should also be considered.
“Therefore, in many cases it’s not quite as simple as being forced to pay a much higher rent or told to pack up and go. However, it’s vital that people know exactly what their rights are, or seek legal advice if they are unsure.”
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