COMMERCIAL LEASE RENEWALS
If a commercial or business lease has security of tenure under the Landlord and Tenant Act 1954 the tenant is entitled to apply to the court to renew his lease if a new lease can’t be agreed by negotiation. This is subject to the landlord’s right to oppose renewal on specified grounds, including redevelopment and own use.
A common problem with unopposed commercial lease renewals is that although the landlord and tenant want to renew they can’t agree on the new rent. There may be other terms in dispute but this is usually the main one. This can lead to interminable negotiations unless one of the parties takes the initiative and either takes proceedings, or gets on with any existing proceedings. The natural reluctance to incur costs and the uncertainty of a judge deciding the terms is usually enough to encourage parties to reach agreement.
Opposed business lease renewals are more akin to adversarial litigation from the outset. The landlord wants possession and the tenant wants to renew his tenancy. Both parties need to assemble and prepare documentary and witness evidence. In some cases, such as renewals opposed on the ground of redevelopment, expert evidence is necessary.
There is a notice procedure that should be followed before any court application can be made for a new tenancy. The notices must be valid and served at the right time on the right person. Mistakes can lead to serious consequences.
We have a great deal of experience dealing with both unopposed and opposed commercial lease renewals. Some of our lawyers have for many years represented major property companies in obtaining possession of sites to allow for developments.