Get it back or let it go?

[Saya]

After many landlord related delays I got my salon open in January 2009. A month later, it got flooded, due to a faulty communal boiler serving the flats above. The landlords accepted full liability and spent the next month making good. I was promised loss of earnings for the period of closure. I didn't receive it.
My cashflow messed up, I couldn't pay my staff, who then left, couldn't buy supplies. I eventually started turning away customers due to lack of staff and supplies. The landlords did tell me not to worry about the rent until the compensation comes through.
In June 2009, they suddenly changed their tune and started demanding the rent, which of course I couldn't pay. In July 2009, I threatened legal action for the owed compo and was advised by my solicitors that I am entitled to withold the rent until such time as the compo is settled.
My salon was then repossessed the following day of my notice on grounds of non-payment of rent. The arrears was app. £3,500.00. The deposit they held was £6,000.00. I have app. £20,000.00 worth of fit-out in there.
They promptly sold the unit with completion within 3 weeks. The new owners have inherited my fit-out.
The new owner has offered to issue a new lease to me. The previous lease was 20 years, the new one would be 5 years.
The rent was a lot higher than market rate and will be the same in the new lease.
Although I get to use my fit-out, it's no longer mine and I would have to maintain it for them.
I will have to pay a new deposit and rent advance.

My question is: is it worth it for the sake of using my fit-out for 5 years? or should I just cut my losses and take my equipment (all the movable stuff), get employed work for a year or so then set up elsewhere?

 

[angel fingers]

saya, i really dont have the answer.
but i just wanted to support you in this nightmare you are experiencing.
i really feel for you:hug:

 

[hartey]

after all that i would clear my salon of all removable goods then smash all non removable and cut my losses! Why should anybody else profit off your fixtures and fittings?

 

[angelina221]

after all that i would clear my salon of all removable goods then smash all non removable and cut my losses! Why should anybody else profit off your fixtures and fittings?

That's really not very helpful and extremely childish!

I feel for you Saya and don't really know what to suggest.
What does your gut instinct say?
Is it a good location? Are there any more premises locally?
Sometimes it is best to cut your loses but you have invested in this salon and it will be hard to walk away.
What are the new landlords like?

 

[hartey]

Nothing childish about it, Glad u can afford to write off £20,000 worth of fixtures and fittings , let alone all the goodwill. Why would anyone let anybody make profit off all their own work?

 

[angelina221]

Smashing up your own property so that no-one can enjoy it-yes i would call that childish.
How exactly is that going to help Saya? It's not is it!

 

[hartey]

If its stuck down and you cant use it because landlord decides to rent out to somebody else then why not smash it up. im sure if i would let anybody profit off of my sweat blood and tears!

 

[Annebet]

Hiya I really feel for you what rotten luck, surely the landlord should pay you for the fittings, I don't see why you should lose out when you have paid out. I agree with Angelina you know if something feels right so go with your feelings. Good Luck with your decisions :hug:

 

[persianista]

personally I would accept the new lease. You have to be pragmatic and salvage whatever is possible from the situation.
Th insurance never covers loss of turnover, only loss of profit. As you had only just started, there would have been no audited accounts to support a claim.
If you go in and smash it all up, you will be up for criminal damage. If you defaulted on your rent, it is all now the landlords property.
The rules for commercial property are extremely different and quite harsh.

 

[bombini]

personally I would accept the new lease. You have to be pragmatic and salvage whatever is possible from the situation.
Th insurance never covers loss of turnover, only loss of profit. As you had only just started, there would have been no audited accounts to support a claim.
If you go in and smash it all up, you will be up for criminal damage. If you defaulted on your rent, it is all now the landlords property.
The rules for commercial property are extremely different and quite harsh.

Thanks for explaining that I did wonder why insurance didn't cover it all.

Im not sure id know which option to suggest as I have never actually owned/managed a salon before so I don't feel qualified to give you any advice but just want to say best of luck.

 

[Saya]

Thanks everyone, this was not how envisaged my new venture to turn out.

Hartey, that's exactly how I felt and was a serious thought at one point!
But of course, in the eyes of the law, it is no longer my property to smash and it would be criminal damage to add to my woes.

It is painful parting with £20,000.00, especially as it was a loan that I'm having to spend the next few years paying back!

As a new business I don't have audited accounts, which is why I'm struggling to substantiate my claim : (

Getting it back to use for the next 5 years, will take another £5,000.00 (my wedding seed fund, and my last bit of money left in my life) to bail the business out.

And even then, a new startup that has suffered so much bad publicity will take ages to pick up, so finding the rent for the next few months is a bit scary.

The location is great, nothing else like it around there and units are hard to get. So it still has huge potential.

But then theres my accumilating mortgage arrears.

Arghhhhh!!!!

Please do keep your thoughts coming in, I have know one to consult with and feeling very alone : (
I'm hoping some devine intervention can give me the answer as everyday I'm flipping between yes and no.
Saya Beauty..x

 

[persianista]

If this is gonna financially break you then please think carefully. Most salons fail due to lack of cashflow. One in three fail anyway.
Whenever my opinion is asked for, I always counsel that you need a chunk of cash behind you to set up a salon. I know people on here claim that they do it for thruppence, but thats not my experience.
To walk away with a 20 grand loss is hard, but could seem small fry if you really get in over your head.
Please consider truthfully what is important to you in life. Salon ownership is pretty hard, and the realities of commercial life are not for the thin skinned or faint hearted.
I wish you the very best of luck whatever you decide x

 

[Saya]

Thank you Persionista,

Food for thought..
I have decided to take the risk, I think this is it for me, I'm going in with everything I got. Though I don't see how I would get what I lost back, I would be happy to see if I could get something back, and take the rest as a loss and deal with it.

So I'm holding my nose, closing my eyes and jumping in!........

 

[persianista]

Best of luck, and I hope it turns out better this time x

 

[kirstys beauty]

Hi Saya

Just wanted to wish you luck. My boyfriends advice to you is go back to your solictor and ask them to explain why acting on their advice it has gone so horribly wrong for you. Also I would of thought that you would still have a strong claim against the landlord as basically has gone back on his word. Apart from everything else it is just not fair that your landlord should be allowed to benefit from such a calamity that was clearly not your fault.

Kirsty

 

[Spa Therapist]

Hi,
I'm really not experienced enough in this area to offer any valuable advice but I just wanted to say that if you can get through this then you'll know that you can survive anything your career throws at you!

Determination is what's needed here :hug:

Best of luck!! xxx

 

[dawn@nouvatan]

No advice because its not my field but, sending you some sincere wishes that whatever you do it will be the right decision both financially and mentally.:hug:
And the old saying whatever doesn't kill you, makes you stronger!x

 

[Glam Nails]

Hi Saya,

How did things turn out for you?

XXX

 

[karmajules]

Just wanted to add my best wishes for you and ditto all the above

Jx

 

[Saya]

Oh thank you everyone, I thought I wasn't going to need to visit this site again after losing everything, but guess what.......?

I'm back!!!!!!!!!

Yes, the landlord sold my unit & yes it was underhanded (the offer was accepted on the basis that I get the boot).

But then I knew the new owner & he couldn't shift my unit, so I took a new lease with him.

Ok, so I no longer own my fit-out, but at least get to make use of it until I'm ready to let go of it, on my terms.

I re-opened November last year & pleased to say, things are going a lot better. Getting more and more customers discovering us and looking forward to investing in some proper advertising.

I don't want to jinx it, but it feels very promising.....: )....x