Business Lease Renewals
Business Lease Renewal Solicitors in Gloucestershire
Whether you are the landlord or a tenant of a commercial premises, Langley Wellington’s experienced commercial property team can assist you in renewing your lease.
Several considerations must be made before the term of a business lease concludes to ensure sufficient time to get your affairs in order. When you instruct a solicitor to support you through this process, there are a few possible courses of action to take:
- Apply for a lease renewal under The Landlord and Tenant Act 1954.
- Oppose a lease renewal.
- Negotiate renewal terms for the lease.
- Involve the Court – in cases where the parties cannot come to an agreement.
- Any appropriate alternatives.
The Landlord and Tenant Act 1954
The Landlord and Tenant Act 1954 provides commercial property tenants with ‘security of tenure’ (in most cases). This Act protects tenants in the following forms:
- Tenants have the right to remain in the premises at the same rent and on the same terms after the lease comes to an end.
- Tenants have the right to automatically renew their lease in certain circumstances.
Most business leases are protected by this Act; however, some may not be. This occurs in cases where parties have a built-in clause to the original lease that ‘opts out’ of the protections provided by the Act.
In addition to protecting the rights of most tenants, the Landlord and Tenant Act 1954 sets out strict procedures and time limits for the lease renewal process, including when notices should be served by, counter-notices should be served by and court application time constraints.
Renewing a Commercial Lease
For a landlord to activate the lease renewal, they should serve a Section 25 notice stating the termination date for the tenancy, between six and twelve months from the date of the notice. Within the notice, the landlord will oppose a lease renewal, and if they object, clearly state the reason(s) why.
A landlord can only refuse a lease renewal based on one of the criteria outlined in the Act. Some of these reasons include the following:
- Non-payment of rent repeatedly.
- Failure to repair the premises by the tenant.
- The landlord wishes to occupy the premises for their own business use.
- The landlord wishes to redevelop the property.
A tenant can also activate the lease renewal by serving a Section 26 notice seeking a new lease and proposing new tenancy terms.
The same time frames apply when a landlord activates a lease renewal or a tenant.
At Langley Wellington, we understand that you will want to renew your business lease efficiently and effectively. Therefore, we provide concise, professional and reliable advice for both landlords and tenants when renewing their lease. Please call 01452 521286 (Gloucester) or 01242 269998 (Cheltenham). Alternatively, fill in this contact form.
Negotiating Lease Terms
The landlord and tenant will negotiate the lease terms once either section 25 or section 26 has been served. Some potential adjustments to the lease might include:
- Reducing the rent value based on a valuation that determines an updated market value of the property.
- Introduce a break clause to the lease to provide some flexibility to the business renting during a period of uncertainty, meaning that they could terminate the lease before the end of the full term.
- Reduce the length of the lease to allow greater future flexibility.
Depending on the nature of the landlord and tenant relationship and how well the lease negotiations are proceeding, it may be necessary to apply to court to get a decision on the terms of the new lease. Should the court order a new lease, the tenant must accept the terms of such a lease unless either the landlord and tenant agree on other terms or the tenant asks the court to ‘revoke’ the order.
Where there is court involvement, the new lease commencement date will be three to four months after the court decides on the application. Otherwise, the new lease will usually commence on the date the landlord or tenant set out in the section 25 or 26 notice.
Commercial Property Solicitors
At Langley Wellington, we have a well-established team of specialist commercial property solicitors who are well-versed in all aspects of business and commercial property lease renewals. We can support you, whether as a landlord or tenant of a commercial premises, when you are renewing your lease by assisting you in sticking to all relevant deadlines and considering all elements of the process.
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