Commercial Lease Renewal 
Commercial Lease Renewal |
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HistoryThe 1954 Landlord and Tenant Act created protection for tenants of business premises including the automatic right to a new lease following the determination of the previous lease – the lease may end but the tenancy continues.A landlord may resist the right of renewal if he can prove one or more of several grounds prescribed in the Act. However, the majority of business leases are renewed without recourse to these grounds. The ProceduresTo determine a lease the landlord must serve a notice of not less than 6 months in a prescribed form expiring on (or after) the termination date. This notice must indicate whether the landlord will or will not object to an application to the Court for a new lease and if there is an objection he must state the grounds.
The tenant has a fixed period in which to reply and time is of the essence. There is then
a period during which the parties can attempt to agree the rent but failure will mean
that either party can apply to the Court to determine the terms - including rent - of the new
lease.
Similarly a tenant can require a new lease within the final year of his existing lease by serving a notice to the landlord who must then respond in a similar way to that described above. If all the appropriate steps are taken within the time limits then the parties will still be in a negotiating position but always against the background that the Court will intervene if the parties cannot agree. |