If you have found a commercial property that you plan to rent you might be concerned that your lease has an expiry date or you may be coming to the end of your lease and wondering what you can do to extend the agreement. In our previous article, “a guide to leasing property for small & medium businesses”, we explored the process of securing a lease for a commercial building and it is during this process that you can negotiate the length of the lease with the landlord. This article explains what you should do when you want to renew your lease agreement to extend your occupancy of the commercial building.
In the UK, the majority of businesses who lease a commercial building will be protected by the security of tenure provisions in the Landlord and Tenant Act 1954. This act provides the tenant with the right to renew their lease in order to extend their occupancy of the building. The lease may renew automatically but you can also request a new lease agreement which can be useful if you wish to renegotiate terms or if the average rental price has dropped.
You should begin thinking about renewing your lease about 18-24 months before it expires, as this gives you enough time to think objectively about the current premises and evaluate if it is still the right building for your business. If you are keen to renew your lease you must give your landlord 6-12 months’ notice of your intention to renew the lease. This notice or renewal request should state your proposed terms for the new lease and the landlord will then have two month window where they can dispute the grant of a new lease.
If the landlord is happy to renew the lease, both parties will have a reasonable amount of time to negotiate the terms of the new lease agreement before the existing lease expires. If you cannot agree terms with your landlord and a new lease cannot be finalised by the time your current lease expires you should make an application to the Court where the terms will be decided. However, your lease will terminate if you do not apply to the court by the day before your lease’s expiration date and your lease is not protected by the Landlord and Tenant Act 1954.
Renewing the lease of a commercial property can be a very delicate and complex procedure and it is vital you get assistance from experienced commercial property solicitors. Rollingsons offer a prompt and efficient service and sound legal advice to clients who are purchasing, selling or leasing property. For more information or to arrange an initial consultation, please contact us on 0207 7611 4848.