Leasing the right property can make or break your business. Most commercial tenants wish to ensure that they can stay in their current premises when the lease is due to end; alternatively, you might need to seek new premises to accommodate any changes your business has undergone since taking on the lease.
The good news is that when a commercial lease expires, tenants often have security of tenure under the Landlord and Tenant Act 1954 (LTA). If you do, this means that you have a right to stay in the premises and apply to renew the lease, provided the correct procedures are followed within the right timeframes. If you are a tenant, you can notify the landlord that you wish to continue the tenancy by serving a Section 26 notice, outlining the terms on which you would like the lease to renew. This will include the amount of rent to be paid and the length of the lease. Your landlord has two months to respond.
By doing nothing when the end date is imminent, the LTA operates so that the lease continues until one party serves notice. For some tenants, the act of serving notice can feel like rocking the boat, but there are many benefits to being well prepared and taking legal advice early. Crucially, the security of tenure provided by the LTA is lost if you don’t follow the correct renewal procedure, meaning that you no longer have an automatic right to stay in the premises if your landlord subsequently gives notice.
Of course, the most common and desirable outcome is that renewals are achieved through mutual agreement. If market conditions have changed since you occupied the premises, this is your opportunity to secure lower rent. If they have increased, you will at least be forewarned that your landlord may raise your monthly financial obligations in line with market prices. You might also be obliged to pay for repairs when the current lease expires.. Knowing how much your potential dilapidations will cost at the end of your Lease will help you plan your finances accordingly.
Getting advice on your legal position from an experienced commercial property solicitor will help you to ensure the legal requirements are met, in the right way and at the best time, and will also help in the event that a disagreement arises between you and your landlord.
Should you have any questions on this topic or anything else then please contact a member of our team to find out more about us and how we can assist on email@example.com or call us 01582 731161.