ARE you unable to find available premises that fit your business needs?
Lease Renewals: considerations for tenants before or after the expiration of the lease
It is increasingly the case that tenants struggle to find premises that are suitable for their business needs. With the uncertainty of the UK’s economy in mind, tenants should consider their ability to obtain a renewal lease of their existing premises, to ensure that the security of their business premises is not at risk and does not become an obstruction to their business agenda.
As a starting point, if you are a tenant with established business plans which include the future occupation of your premises, you should consider how long you have left to run on your current lease. Tenants occupying premises for the purpose of running a business may have a right to request a renewal lease from their landlord where the lease does not expressly exclude the provisions of Part II of the Landlord and Tenant Act 1954. The process for renewing or ending the lease can be initiated by either the landlord or the tenant.
Commencing the renewal procedure and entering into a renewal lease will provide tenants with the benefit of a fixed term. Tenants are advised to consider their renewal strategy at least 12 months prior, and in some circumstances 18 months prior, to the expiry of their lease.
Tenants seeking to secure a new lease of their current premises should note the outline procedure:
* The tenant must serve a prescribed form of notice upon the landlord detailing the terms for the proposed new lease.
* Following receipt of the tenant’s notice, the landlord will have a period of two months within which to dispute the grant of a new lease.
* If the landlord is happy for a new lease to be granted, the parties have a specified period of time in which to agree the terms of a new lease. This will be set by the tenant’s notice.
* Note that after two months have passed from the date of the tenant’s notice, either party can apply to the court to settle the terms of a new lease. Usually however, the parties will negotiate and agree between themselves the terms of the new lease.
Aside from business security and continuity, there may be additional benefits to a lease renewal. For example, it is entirely possible for tenants to come to an arrangement with their landlord whereby they roll over their dilapidation obligations under the current lease into the new lease which has the effect of delaying the need to spend money in repairing the premises. Note, however, that any outstanding dilapidations could bring a resistance from the landlord to any claim for a renewal lease under the formal notice procedures.
Franklins Solicitors LLP have an experienced team who can guide you through the lease renewal process and assist with any application to the court that may become necessary.
Should you have any queries in connection with your business needs and the implications of your current tenancy then contact Rhiannon Penney on 01908 660966 or 01604 828282, or via email at
