TRANSFER OF COMMERCIAL LEASES OF GOVERNMENT PROPERTY WITH A GOODWILL PROCEDURE REGULATIONS

TRANSFER OF COMMERCIAL LEASES OF

GOVERNMENT PROPERTY WITH

A GOODWILL PROCEDURE

SUBSIDIARY LEGISLATION 573.02

TRANSFER OF COMMERCIAL LEASES OF

GOVERNMENT PROPERTY WITH A GOODWILL

PROCEDURE REGULATIONS

14th December, 2017

LEGAL NOTICE 369 of 2017.

The title of these regulations is the Transfer of

Commercial Leases of Government Property with a Goodwill

Procedure Regulations.

(1)

Anyone who has, a commercial property by

title of lease from the Government or the Lands Authority, can while

the original lease is still running, transfer his rights in the lease to

third parties, provided that this transfer is subject to the following

conditions, which must be fully observed

(a)

the original tenant shall give a copy of the

preliminary agreement made between him and the interested

third party to the Lands Authority, to which agreement must be

attached a sworn declaration that that is the only existing

agreement between the parties and that the conditions set out

in it will not be changed in any way. In the agreement there

should also be declared the full amount of the value of

goodwill which is going to be transferred. If it results to the

Lands Authority, even after the signing of the new agreement,

that there was even one condition changed from the agreement

that was given to it, then the Authority has the right to

terminate with immediate effect such new agreement;

(b)

the original tenant shall guarantee that if there is

no bidder, and in the event that the interested third party does

not come forward to sign the transfer of the remainder of the

original lease upon himself with the Lands Authority, he shall

be liable for payment of rent for the remaining period from the

call for tenders until the end of the original term of the lease;

(c)

the original tenant shall guarantee that the rent

shall never be less than what it actually is and if the offer is

less, and if the interested third party does not come forward to

sign the transfer of the remainder of the original lease upon

himself with the Lands Authority, he shall be liable for

payment of rent for the remaining period from the call for

tenders and the end of the original term of the lease;

(d)

the original tenant shall guarantee that the terms

of the original lease are in no way changed;

(e)

the original tenant shall guarantee that when the

original lease is transferred onto the interested third party,

TRANSFER OF COMMERCIAL LEASES OF

GOVERNMENT PROPERTY WITH

A GOODWILL PROCEDURE

following a call for tenders, he will remain jointly and severally

liable with the new tenant for payment of the rent until the end

of the period of the original contract;

(f)

the agreement between the original tenant and the

third party concerned is subject to the right of the Authority to

issue a call for tenders.

(2)

Before issuing a call for tenders, the Lands Authority

shall

(a)

verify that the contractual provisions in the

original contract have been fully met and that there are no

violations of any law or contractual provision in respect of that

property, including that there are no arrears of rent payments;

(b)

be advised of the value of the goodwill,

improvements, furniture and other objects found in the rented

property and for which the original tenant is expecting to

receive a payment. In the eventuality that the transfer of the

remaining term of the original lease is done in favour of the

interested third party, the same interested third party, before

signing this agreement, shall pay the amount equivalent to ten

percent (10%) of that sum.

(1)

Having observed in full the conditions imposed

in the previous regulations, the Lands Authority shall issue a call for

tender to the public, which shall be publicized widely on various

media informing the public that the original tenant does not want to

remain in the original lease and inform the public that there is an

interested third party who is ready to assume the remaining term of

the original lease and this on the preliminary agreement that has been

made and that the interested third party has been reserved the right of

first refusal.

(2)

The Lands Authority may, in its absolute discretion,

require a bid-bond with the tender.

(3)

If the transfer of the remaining term of the original lease

is made to the tenderer and not the interested third party, the tenderer

is obliged to pay an amount equal to ten percent (10%) of the value of

the goodwill, improvements, furniture and other objects found in the

property leased, to the Lands Authority and for which the original

tenant is expecting to receive payment. The remaining balance of

ninety percent (90%) shall be paid by the tenderer to the original

tenant. Having made such payments, the property can be transferred to

the tenderer.

The Lands Authority shall ensure that all costs for the

purpose of transfer, including costs for the tender, shall be levied on

the person to whom the property is transferred to for the remaining

period of the rent.