Tenants on Derbyshire industrial estate handed rent increases of up to 50 per cent - a month after its sale from the county council for £2.5 million

Derbyshire County Council sold Salcombe Road Industrial Estate in Alfreton, which contains 16 units, at auction in August to Sandyford Properties.

Now, just days into the private firm’s ownership of the site, tenants have been handed rent increases of up to 50 per cent, with some businesses now considering their continued residence on the site.

The move has been dubbed ‘crafty and backhanded’ by impacted tenants and that it was a “sad” surprise and an unwelcome change from cooperative tenancies under the county council.

Tenants have told the Local Democracy Reporting Service that the new owners have deployed rent reviews which had been due in March, when the site was under council ownership, but had been skipped without change, with proposed rent increases set to be backdated by Sandyford.

Meanwhile, while under the ownership of the county council, businesses had not been charged VAT, but Sandyford is choosing to deploy this charge, presenting an additional unexpected expense.

Tenants feel that Sandyford’s ability to do this ought to have been flagged to them after they claimed the county council had reassured them that there would not be any change to contracts or rent.

Grahame Weadon, owner of Better Metal Stores, who has rented a unit on the industrial estate for 25 years said his contract involves rent reviews every three years as part of a clause in a six-year agreement.

Mr Weadon is already VAT registered so the rent increase is the sole additional cost. He said this increase will ensure that he will retire from the business following the end of his contract in 2028, bringing forward a decision he had not yet finalised.

Mr Weadon’s annual rent has been increased by 22 per cent from £8,800 to £10,800.

He said: “They are both in the wrong. The council said it wouldn’t change and it feels like they did not do their due diligence on the company which was taking over.

“In April we were told the council were selling the estate and we never had any hassle from the council.

“When I had a burglary the council went halves with me on the damage to the doors.

“People are just asking ‘what is going on?’.

“I am not happy about it, but I can’t do much about it because the rent review is in the council. I just don’t understand how it can be backdated to March when this company didn’t own it.

“I am worried there might be other things they look to do as well now like when I leave they could ask me to return it to how it was when I moved in 25 years ago.”

Matthew Hales, owner of Rentacampa, has rented units on the estate for a combined seven years, has been handed a rent increase of 50 per cent and will now also be charged VAT and is not currently registered.

His rent has increased from £1,000 to £1,500 a month and will be hit by a £300 per month VAT bill too, leading to £6,000 additional rent owed over the year.

Mr Hales has been told that if he does not want to pay the increased rent he would need to find another business to occupy the unit for the remaining three years of his lease.

He said: “We feel let down. It was totally unexpected

“We are all in the same boat. It is all a shock and I think it is very crafty what they have done. They bought the units with the tenants but they are clearly not bothered if we move out.

“They have said I would need to find someone to replace me if I want to move out.

“You would think the money between September and March would be for the council, not to be decided by the new company.

“What this new company is doing is probably right with the contract but it is backhanded and it has been craftily done.

“If they are expecting me to pay until March, then that would be the end of me down there.

“DCC were really good to us and to do this to long-standing tenants, or any tenants, is not right at all. Most of them will be stuck, it will be awkward for a lot of them and a 50 per cent increase is a lot of money. A lot of them have equipment which can’t be moved.”

Cllr Stephen Reed, the county council’s cabinet member for business services, said: “The tenants at Salcombe Industrial Estate are protected by the Landlord and Tenant Act which means the new landlord is only able to increase the rents when there is a rent review due as part of the lease terms. “Any proposed rent increases must be in line with the terms of the existing lease and, if applicable, comparable to the open market rents paid by other tenants in similar buildings. The landlord has the option to elect for the payment of VAT which is a standard clause in commercial leases

“The tenants can seek their own professional advice from a chartered surveyor specialising in rent reviews.”

Paul Brindley, managing director of Sandyford Properties, said: “Sandyford has inherited the leases previously in place with DCC and we are continuing to charge the rents set out in those agreements until they expire, often many years into the future. “Some leases include rent reviews linked to the Retail Price Index, calculated using official ONS data, and we are applying the same mechanism as the council did previously.

“The leases also allow for VAT to be charged on rent. While the council chose not to do so, Sandyford is VAT-registered and therefore required to charge VAT under HMRC rules.

“This is standard practice across commercial property and enables us to recover VAT on the significant costs of maintaining and improving the estate.

“Where leases come up for renewal, rents are set at the prevailing market level based on advice from local agents.

“In one case, a tenant has been offered a renewal at the current market rent, but we have also offered to extend their occupation temporarily to help them relocate if they wish.

“In short, Sandyford is not imposing discretionary rent increases: any changes reflect either contractual RPI-linked reviews set out in the council’s leases or, in the case of lease renewals, current market rates supported by independent advice.”