Whether you’re a business tenant or a commercial property landlord, lease renewal can be a complex issue. Fortunately, help is at hand. The team here at The Law House are experts in all aspects of commercial property law and are here to assist you. Our specialists will advise you on your rights, guide you through the steps you need to take and help you to achieve the outcome you want.
Who has the right to renew a lease?
The majority of tenants occupying business premises have a right to renew their leases when they end. However, there are some exceptions to this.
Farming business tenants
Serviced tenants employed by their landlords
Businesses on a fixed-term tenancy of six months or less
Businesses that have waived their right to renew at the beginning of their lease
A solicitor at The Law House will be able to advise you whether you (or your tenants if you’re a landlord) have the right to renew.
How does the lease renewal process work?
Both tenants and landlords can apply to the court for a new tenancy. In order to start the process, one party must send the other the relevant form.
Landlords are required to send a ‘section 25’ form to their tenants ending the existing tenancy and establishing the terms of the new agreement.
At this stage, the terms are simply the landlord’s suggestions and they can be subject to negotiation. If a tenant wishes to renew, they must send their landlord a ‘section 26’ request. This sets out their suggested terms, which again can be subject to negotiation.
Section 25 and 26 forms should be sent at least six months, but no more than a year, before the date when the landlord or tenant wants the new agreement to start.
Landlords are required to respond to a section 26 request sent by a tenant within two months of getting it if they intend not to grant the new lease.
Tenants don’t have to respond to section 25 notices, but it’s advisable to seek professional advice regarding the terms of the new tenancy and to negotiate an agreement.
Either party can apply to the court as soon as the tenant has been given a section 25 form by their landlord.
In contrast, a tenant must wait until their landlord has responded to a section 26 form, or has had two months in which to do so, before applying to the court.
When can landlords refuse lease renewals?
Landlords can refuse to grant new tenancies in cases where the tenant doesn’t have the right to renew the lease – but in all other scenarios, they are only able to refuse a lease renewal on specific grounds laid out in the Landlord and Tenant Act 1954.
For example, if the tenant has breached their obligations (such as by being persistently late in paying rent or not keeping the property in a state of good repair), the landlord can refuse to renew the lease. Landlords can also refuse to renew if they offer to provide other suitable accommodation as an alternative.
There are a number of other reasons in addition to these that a landlord can cite to avoid having to renew a lease. Your solicitor will be able to advise you on what these are.
How can the Law House help?
Commercial property agreements can be highly complicated. Rather than trying to navigate these legal issues yourself, it pays to enlist the help of experts. At The Law House, we can advise you on lease renewals whether you’re a tenant or a landlord.
By coming to us, you can ensure your rights are protected and avoid a range of potentially costly and damaging mistakes.
For more information, don’t hesitate to get in touch. You can call us on 020 3150 2525 or email us at email@example.com