Commercial Lease Renewal Solicitors

Commercial leases set out the terms under which a tenant occupies a commercial property. When the time comes to consider renewing a lease, it’s important to know which type of commercial lease you have, and what your rights are as a landlord or tenant.

Our commercial lease renewal expertise

Being familiar with your lease and how it might be renewed is crucial both as a landlord and a tenant.

Our commercial lease solicitors advise landlords and tenants on the lease renewal process, including how to initiate the process and what to do if both parties cannot agree on the terms of a new lease.

What happens when a commercial lease expires?

Landlords or tenants should consider their options around 18 months before the current lease expires. When it comes to lease expiration, what happens depends on whether it has security of tenure or not.

Security of tenure (under the Landlord and Tenant Act 1954) gives tenants the right to remain in possession of leasehold business premises after the lease term ends. If a landlord wants to end the lease, this can only be done if they issue a notice to quit.

Tenants with security of tenure

A business tenancy (where a property is occupied for a trade or profession) that is protected under the Landlord and Tenant Act 1954 (‘the Act’) will not automatically end once the fixed term of the commercial lease expires. A lease which falls within the Act is often known as a Protected Tenancy.

If the commercial lease does have an exclusion clause, the tenant will have signed a statutory declaration.

No security of tenure

A lease that excludes the Act will end on the date specified within the lease, and the tenant must vacate the property before then.

Landlords and tenants can agree on a new lease, however, they are not obliged to do so. If you require assistance with a lease, our commercial lease solicitors can help.

How do I initiate a commercial lease renewal?

Where possible, the landlord and tenant should discuss a lease renewal as soon as the opportunity arises, and it is a good idea to seek advice on your options from our property litigation solicitors before entering such discussions.

Tenants with security of tenure

Both parties also have the option of initiating the statutory lease renewal process and the starting point is to serve notice.

If the statutory process is initiated, strict timescales are applied. If a party fails to comply, there are several implications and consequences, including bringing the current tenancy to an end. Whether you are a commercial landlord or tenant, you should seek legal advice before serving a notice or immediately upon receipt of the notice.

Landlords

If a landlord initiates the renewal, a Section 25 notice will be served on the tenant. The Section 25 notice will either set out the terms for a renewal lease or the grounds that will be relied upon opposing the renewal. The notice provides the tenant with six to 12 months’ notice.

The grounds that can be relied upon to oppose a renewal lease are specific statutory grounds.

Tenants

A tenant can initiate a lease renewal but serve a Section 26 notice to their landlord. This notice must set out the date for when you wish the new lease to commence and include any new proposed terms. You must give between six and 12 months’ notice before the new lease begins.

A landlord can serve a counter notice to a tenant’s Section 26 notice.

Proceedings / when both parties cannot agree on the terms of a new lease

If the grounds for possession or proposed renewal terms are disputed, either the landlord or tenant must issue proceedings to resolve the matter. Additionally, for a tenant, proceedings will be required to enable ongoing occupation of the premises whilst the dispute is resolved.

If both parties cannot agree on the terms of a new lease, our property litigation solicitors are here to help. The first step should be to try to resolve the dispute amicably through Alternative Dispute Resolution, however, if that fails, you initiate the statutory process and can ask the court to decide. Either party can issue court proceedings, however, the claim must be made before the notice served expires. Whilst the lease renewal is being decided the tenant is entitled to remain in occupation.

No security of tenure

The right of occupation of a tenant without security of tenure will end on the last date of the fixed term of the lease. If the landlord or tenant would like to enter into a further lease, discussions should take place before the end of the fixed term.

Occupation after the fixed term will amount to trespass unless otherwise agreed. Landlords should be careful if allowing occupation after the fixed term. An implied tenancy may arise.

Introducing new terms into a lease

Under the Landlord and Tenant Act 1954, rent and the lease term can be negotiated at the point of renewal. The rent can only be amended to match the current market rent of a similar property in the same location and it can increase or decrease. It is advised that landlords seek specialist advice from a surveyor before revising rent costs.

Drawing up a revised lease

If both parties agree on the terms and conditions of a new lease, a revised document should be drawn up and signed. If the lease is relatively new, you can complete a lease by reference which incorporates any new terms or variations, rather than creating a new lease entirely.

Our specialist lawyers can advise on the best approach and guide you through court proceedings if necessary.

Get in touch with our commercial lease renewal solicitors in Bristol

Renewing a commercial lease can seem like a complicated and time-consuming task. Our commercial property disputes team is experienced in dealing with lease renewals. Call us on 0117 325 2929 or complete our online enquiry form.

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