Landlord and Tenant
Thursday, 4th November 2010
When a commercial lease is coming to an end, it can be both an exciting and a difficult time for a business.
Your position will depend on the terms of your lease and also the legislation which governs business tenancies. Whether you are a Landlord or a Tenant, and whatever outcome you would like, here at Crombie Wilkinson we will be happy to look at your lease, demystify the law and explain and discuss your options.
Commercial leases generally provide security of tenure for Tenants, as governed by the Landlord & Tenant Act 1954. These are known as “protected leases”. This protects Tenants from eviction and gives them the right to renew their lease when it comes to an end.
ADVICE FOR LANDLORDS
- If you want your Tenant to vacate and the lease is “protected”, there are only limited grounds on which you can bring it to an end. You will need to serve a Notice on the Tenant (at least 6 months prior to the end date). Forgetting to serve a Notice or serving an invalid Notice can have serious consequences.
- If the tenant has failed to pay the rent or carry out some other lease obligation you may be able to forfeit the lease and bring it to an end early.
- If the lease is not protected but you are happy for the Tenant to remain after the fixed end date, it is advisable to put a new lease in place and take the opportunity to renegotiate some of the terms.
ADVICE FOR TENANTS
- If you want to quit your tenancy, you can do so by simply vacating before the end of the term. If you remain beyond that date, and the lease is protected, it will not end automatically and you will need to serve at least 3 months’ Notice on your Landlord.
- If you want to quit your tenancy early, you may be able to “break” the lease if you have a break option. Alternatively, your Landlord may accept a surrender of the lease, but is not obliged to do so. The Landlord may agree for you to assign the lease to a suitable new Tenant. However, in agreeing to the assignment, the Landlord may ask you to guarantee the new Tenant’s performance of the lease obligations, which is a serious undertaking on your part.
- If your lease is not protected but you want to remain in the premises, it may be advisable to put a new lease in place and you may want to renegotiate some of the terms.
In all the circumstances mentioned above, it would be advisable to take professional legal advice.
Useful information is also available at www.leasingbusinesspremises.co.uk
For more information please contact Duncan Morter or Jane Morgan (Commercial Property) or Neil Largan (Dispute Resolution) on 01904 624185.
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