Biz Extra
Published: October 25, 2021 | Updated: 28th October 2021
Commercial Property Solicitor Patsy Whitford answers some common questions around renewing a commercial lease and outlines the process of renewal.
Yes, this can either be done via negotiation with the landlord, or you may benefit from a legal right often called security of tenure or LTA rights, which is granted by the Landlord and Tenant Act 1954.
This entitles a tenant to stay in the property beyond the end of the lease term and to request a new lease on substantially the same terms as the existing lease.
As with all these things, there are conditions attached, but if these are satisfied and the correct procedure followed, then the tenant can renew their commercial lease.
The answer to this is both yes and no. Part of the criteria for requesting a new lease is that you are in occupation of the premises.
You can request a new lease for the part of the premises that you are occupying, but not the part that you have sublet.
If your subtenant leaves the property before the end of the lease, then you could request a new lease of the whole of the premises, so each case needs to be considered on its own set of circumstances.
As explained above, you can either approach the landlord to discuss a new lease, or if you have a lease that benefits from security of tenure, you can follow the legal procedure and serve a s26 notice on the landlord.
This notice sets out your suggestions for a new lease, which normally includes at least a new rent and term and any other items you may wish to vary from your existing lease terms.
It is advisable to broadly stick to the terms of the existing lease, as if the matter has to go to court, the existing lease terms are the ones the court will start with when deciding what the new lease should include.
The s26 notice needs to specify the proposed start date for the new lease. This cannot be more than 12 months or less than six months after the making of the request.
The date specified as the start date for the new lease cannot be before the end date of the existing lease.
Yes, the landlord does have some options for refusing to renew your lease if you have served a s26 notice on them.
These are limited to specific grounds that the landlord can rely on and include circumstances such as the landlord wants to use the property for themselves or they intend to redevelop the property.
Each of the grounds have criteria that the landlord would have to prove, but there are circumstances when the landlord could refuse to renew the lease.
The landlord cannot be forced to renew a lease for a ‘bad’ tenant. For example, if you have failed to pay the rent then the landlord is not obliged to grant you a new lease.
If you have served a s26 notice on the landlord, then the landlord has two months to respond if they wish to oppose the grant of a new leases.
If you have any queries regarding commercial lease renewal, please get in touch with our bright Commercial Property team for expert advice.
Members of our team would be happy to discuss your individual circumstances.
We offer a free initial appointment to all new clients. To get in touch with our bright lawyers simply call 01202 499255 or visit our get in touch page.
