COMMERCIAL PROPERTY RENEWAL RIGHTS
COMMERCIAL PROPERTY RENEWAL RIGHTS

9 March 2018

Commercial tenants should be aware of their renewal rights when their lease term comes to an end and act sooner rather than later to secure continued occupation of their property, advises Kathryn Johns, a commercial property solicitor at Phillips.

Any business tenancy (not a residential letting) has an automatic right of renewal at the end of the term, under the Landlord and Tenant Act 1954 if the tenant is in occupation, as well as the right to stay in occupation after the term has expired. Even if the relationship between landlord and tenant has broken down, a tenant can oblige a landlord under statutory provisions to renew their lease on similar terms as before.

The landlord may be obliged by a court to renew the lease on similar terms, taking into account any modernisation of the accepted terms in the marketplace, if agreement cannot be reached beforehand between the parties on a new draft lease. The annual rent and lease term may be different to the previous lease, to reflect the open market rent and usual length of occupation in the market for this particular property. If the parties cannot agree on these terms, the court may impose an annual rent (based on the open market) and a lease term.

Only in certain circumstances can this right of renewal be rejected, such as a landlord’s redevelopment plans for the site or because the landlord wants to occupy themselves.

It is open to both parties to agree that the tenant’s right to renew be excluded when the lease is initially granted, but the tenant (or someone authorised to do so on their behalf) will have to swear a statutory declaration to confirm they fully understand the implications of this.

The above is only a short summary of some aspects of the 1954 Act and its consequences, which can be complex. It is strongly recommended that specific legal advice be sought with regard to any proposed renewal, whether by a landlord or tenant, and the summary given above should not be used as a guide for any particular circumstance.

For further advice on your long-term property plans, please contact Kathryn Johns at Phillips on 01256 854674 or by email at [email protected].

Have more questions?
Our expert solicitors are here to take the worry off your hands.
Please call us or email and we’ll get back to you as soon as possible.
News
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE

Phillips Law is delighted to have advised Mactaggart Family & Partners and Longstock Capital Limited on a multi-million-pound agreement for lease with The AA to move their headquart ...

More
Deliveroo worker status judgment: implications for employers
Deliveroo worker status judgment: implications for employers

In our January update we reported on the Supreme Court decision in the long running dispute between Deliveroo and the unions representing many of its riders. You can read the full Judgm ...

More
New right to unpaid leave for carers
New right to unpaid leave for carers

From 6 April 2024 carers will have a day one right to request one week’s unpaid carer’s leave per year. Draft regulations for the Carer’s Leave Act 2023 provide the detail on this new r ...

More
Employment Update – January 2024
Employment Update – January 2024

Welcome to the new year! As we embark on 2024, it’s crucial to stay informed about the latest developments in employment law. Here’s a snapshot of key updates and changes th ...

More
Phillips Law advise Nordic Design House on the acquisition of their first UK showroom in London
Phillips Law advise Nordic Design House on the acquisition of their first UK showroom in London

Phillips Law is delighted to have advised Nordic Design House on the acquisition of their first UK showroom in Clerkenwell, London. Nordic Design House is a renewable furniture design c ...

More
Three Promotions – October 2023
Three Promotions – October 2023

We are delighted to announce three well-deserved promotions within our firm. Sian Lias and Lisa Perry have been promoted to the position of Legal Director in the Wills, Trusts and Proba ...

More