What to Do If Your Commercial Lease is Due to Expire
If your commercial lease is due to expire then you have two options available: either remain in situ or vacate the premises. The way you execute your decision depends on the terms of the lease, and in particular whether or not you have security of tenure.
Remain in situ
If you would like to remain in your commercial premises, then you need to look at the terms of your lease and confirm whether you have security of tenure. Actually, all commercial leases are protected by security of tenure under the Landlord and Tenant Act 1954. However, it is possible that your landlord asked you to opt out of this right. If so, there will be an exclusion clause in your lease. You will also have signed a statutory declaration at the start of your tenancy. It is vital to establish whether you have security of tenure, as this dictates your next steps.
If you do not have security of tenure
Then you do not have the automatic right to renew your lease. Your landlord is entitled to end your tenancy when the lease expires. If you want to stay, then you need to speak to your landlord about remaining in situ. If your landlord wants you to vacate, then you may have little option but to comply. Of course, you can always attempt to negotiate first – you may be able to come to an agreement. However, your landlord can change the terms of the original lease as they see fit, such as increasing the rent. It is also worth noting that certain tenants do not enjoy security of tenure, including those who:
- Have sub-let the premises and are not occupying them personally
- Are using the premises for non-business purposes, or for business that has not been agreed by the landlord
- Have fixed-term tenancies of six months or less
- Are farm business/mining tenants
If you do have security of tenure
Then you have the automatic right to stay in the commercial premises and renew your lease, once it comes to an end. After the expiration date, your tenancy will continue on the same terms as set out in the lease. For example, it may roll on to a periodic tenancy. Or, you can exercise your right to a statutory renewal of your commercial lease. You do this by serving a section 26 notice on your landlord between six and 12 months before your lease is due to expire. Alternatively, your landlord may initiate the process by serving you with a section 25 notice. The terms of the new lease cannot be substantially different to the terms of the original lease. When you serve a section 26 notice, your landlord has two months to decide whether or not to renew your lease. If you have security of tenure, then it is very difficult for your landlord to refuse. However, the landlord may be able to serve you notice to quit – even if you have security of tenure – under certain circumstances. The most common reasons are that:
- You are in rent arrears (although there has been some leeway during the Covid-19 pandemic)
- You have substantially breached your tenant obligations
- The landlord wants to redevelop the property
- The landlord wants to take possession of the property for themselves
If your landlord is trying to force you from a commercial premises and you want to stay, then please contact us at Mark Cook Solicitors. If you have security of tenure, then your landlord may be breaching your legal rights. There have been cases in which landlords have falsely declared redevelopment works, just so they can evict the tenant and increase the rent. If your landlord is unable to prove their case – such as the genuine intent to redevelop the property – then you may have grounds for legal action.
Vacate the premises
If you wish to vacate the commercial premises at the end of your lease, then you can simply leave the premises on the date your lease ends. Should you stay on after this time, then you will roll on to a periodic tenancy. If you wish to vacate after this point, you must give your landlord at least three months’ notice by serving a section 27 notice.
Speak to our Sunderland solicitors
This is a very brief overview of the information you need to know, if your commercial lease is due to expire. The reality is that each situation is different. It all depends on the terms of the lease, your conduct as a tenant, and the intentions of both you and the landlord. That is why we recommend getting legal advice tailored to your specific set of circumstances. We can help you further, explaining your options and the best way forward.
For a no obligation enquiry, please call us on 0191 567 7244 and we’ll be happy to help you.
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