lease renewals

How a commercial lease renewal is dealt with depends on whether the lease is protected by the Landlord & Tenant Act 1954 and as amended by the Regulatory Reform (Business Tenancy) Order 2003.

If the lease is within ‘the Act’ then there are strict procedures/ notices to follow. Getting the right tactical advice is paramount. If a lease renewal cannot be agreed with the landlord or the tenant then the court will decide whether a new lease should be offered and on what terms.

A lease that is granted outside ‘the Act’ is deemed to end on the contractual date as stated within the lease and a tenant has generally no legal rights to stay in occupation beyond this date. Any negotiations to renew the lease are therefore dependent on the willingness of both parties to cooperate.

It is essential that both tenants and landlords look at their own position well in advance of the renewal date in order to consider their options. Time is of the essence.

Factors to be considered include notice periods (serving of these is often tactical), planned relocation, expansion or contraction and the often contentious covenants within the lease with respect to repairing obligations and dilapidations.