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Renewing your business lease.

If you are a business tenant in occupation of commercial premises under a ‘qualifying lease’ you will have a statutory right to request a new lease when the fixed contractual term of your existing lease has expired.

What is a qualifying lease?

A qualifying lease is essentially a lease whose original term was granted for a period of six months or more, and whose terms are not “contracted out” of the security of tenure provisions contained in the Landlord and Tenant Act 1954.

How do I know if my existing lease is contracted out?

Your existing lease will contain a clause to confirm if it has been contracted out.

If this is the case, you will not automatically be entitled to apply to the court for a new lease at the expiry of the fixed contractual term. If you wish to remain in occupation after this time you should commence early negotiations with your landlord to secure a new lease.

What procedure must I follow to renew my lease?

Assuming your lease is not contracted out; you can apply for it to be renewed by serving your landlord a notice under section 26 of the Act setting out your proposals for a new lease. The notice must be set out in a prescribed form.

Your landlord can oppose your application for a new lease by relying on one of a number of grounds set out in the Act. But, if they do not serve a counter notice setting out their ground of opposition within the time frame specified in the Act you will be entitled to a new lease and your landlord will loose their right to oppose the grant of a new lease.

Conclusion

The above is only a brief summary of a tenant’s right to renew an existing lease, and it is important for any tenant considering renewing their lease to take further advice in relying on their statutory right and in particular to ensure compliance with the statutory time tables and notice procedures.

In addition to this, a tenant must also consider the usual issues in taking a lease such as the level of rent, the lease terms, any stamp duty land tax that may be payable and land registration formalities.

Please contact us to discuss any commercial property matters.

 

Disclaimer

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published.Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

 

 

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