Security of Tenure
Our commercial property solicitors help landlords and tenants with all aspects of security of tenure law.
Whether you are negotiating the inclusion/exclusion of security of tenure in a commercial lease, or you wish to renew/terminate a lease under security of tenure, we have the necessary expertise.
For a free quote, call us on 0191 567 7244 and we’ll be happy to help you.
What is security of tenure?
Security of tenure is when the tenant of a commercial property is automatically allowed to renew their lease when the initial term expires. A landlord can only refuse on certain grounds – for example, if the landlord intends to occupy the building, or the tenant has breached the terms of the lease.
Security of tenure is governed by the Landlord and Tenant Act 1954. The law aims to protect businesses from the hassle and expense of having to relocate commercial premises. This is particularly important to businesses who rely heavily on their geographical location, or who have spent a lot of money on modifying the property to suit their needs.
Security of tenure – tenant's rights
Under security of tenure, the tenant has the right to stay in a commercial property when the lease comes to an end. The tenant can vacate the premises if they choose. But if the tenant wants to remain in situ, the commercial lease must be renewed on the same terms, although rent may be negotiable.
Where security of tenure exists, a landlord can only evict a commercial tenant if one or more of the following can be established:
The tenant has breached the terms of the lease – e.g., rent arrears or failure to meet repair and maintenance obligations
The landlord provides the tenant with suitable alternative accommodation, and the tenant is happy to accept
The landlord intends to occupy the property
The landlord wants to carry out substantial works to the property, and these works cannot be completed with the tenant in situ
The landlord intends to rent out the entire building, rather than just part of it
How to avoid security of tenure
The commercial lease determines whether or not a tenant is protected by security of tenure. It is possible to exclude security of tenure from the lease, but there is a specific process that must be followed.
Firstly, the landlord must give the tenant notice that the lease excludes security of tenure. The tenant must then sign a declaration. If the lease is due to begin in less than 14 days from the date of the statutory notice, the tenant must sign the declaration before an independent solicitor.
Tenants may be reluctant to forgo security of tenure, as it could compromise their business continuity at the end of the lease. In return, a landlord may offer reduced rent or other incentives.
Negotiating a commercial lease
Security of tenure is one of the major issues when it comes to negotiating a commercial lease.
The landlord may seek to exclude security of tenure. That way, they retain greater control over the property and can remove a tenant at the end of the initial term, should they want to. This will be especially important if the landlord has future plans for the premises.
On the other hand, the tenant may want to include security of tenure in the lease. It acts as an insurance policy, ensuring they can renew their commercial lease if they want to stay put. Otherwise, the landlord can terminate the lease at the end of the term without reason.
Both parties should get independent legal advice when negotiating the terms of a commercial lease. We act for both commercial landlords and tenants. Whatever side of the negotiating table you are sat, we can advise you on the implications of security of tenure.
When working with landlords, we can explain what security of tenure means, and can seek to exclude it from the lease if that is your preference. We understand the legalities inside out, and will follow the necessary protocols to ensure you remain compliant with the law.
When working with tenants, we can negotiate the inclusion of security of tenure if this is important to you. Or, if you are happy to proceed without security of tenure, we can make sure you understand exactly what this means. Our job is to safeguard your interests. We want to be certain that you are in possession of all the facts before entering into a commercial lease.
Exercising security of tenure rights
When a commercial lease is nearing the end of its term, the landlord and tenant must decide whether they wish to renew the lease and on what conditions. The process very much depends on whether or not security of tenure is incorporated into the lease.
If security of tenure does exist, the tenant will have the right to renew the lease. The landlord is entitled to refuse, but only on certain grounds. We can advise whether the landlord meets the necessary grounds for refusal. If not, the tenant may be entitled to take legal action.
Security of tenure can be a source of dispute between commercial landlords and tenants. It is vital for both sides to get expert legal advice when faced with a security of tenure dispute. Our solicitors can clarify your legal position and discuss the next steps with you.
Speak to our commercial property solicitors
Our commercial property solicitors act on a fixed fee basis. This starts with a free initial consultation. Contact us to discuss your requirements. Afterwards, we provide a fixed fee quote with no hidden charges.
Get a free, no obligation quote from our commercial conveyancing solicitors. Call us on 0191 567 7244 and we’ll be happy to help you.