Renewing a Commercial Lease
How to renew a business lease under Part II of the Landlord and Tenant Act 1954.
Prezentare generală
If you have a business tenancy protected by Part II of the Landlord and Tenant Act 1954, you have the right to a new lease when your current lease expires, unless the landlord can establish one of the statutory grounds for opposition. The renewal process involves either agreement between the parties or an application to the County Court. Many business leases are contracted out of the 1954 Act — check your lease carefully.
Cine poate folosi acest proces
- You occupy premises for business purposes
- Your tenancy has not been contracted out of the Landlord and Tenant Act 1954
- Your landlord has served a section 25 notice, OR you wish to request a new tenancy under section 26
Proces pas cu pas
Check your lease
Check whether your lease is protected by the 1954 Act. If the lease contains a declaration that the tenant agrees to waive protection, it is 'contracted out' and you have no right to renew. Contracted-out leases require a specific notice and declaration process.
- Look for a 'contracting out' notice or statutory declaration
- If in doubt, take legal advice
Serve or respond to notices
Either the landlord serves a section 25 notice (stating whether they oppose renewal) or the tenant serves a section 26 request for a new tenancy. These notices set out the proposed terms and start the statutory timetable.
- Section 25 notice: served by landlord 6-12 months before lease end
- Section 26 request: served by tenant 6-12 months before proposed start of new tenancy
- Both are formal documents — use the prescribed form
Negotiate new terms
Negotiate the terms of the new tenancy: rent, length of term, repair obligations, rent review provisions, break clauses. If the landlord opposes renewal, they must establish a statutory ground (s.30 grounds include own use, demolition/reconstruction, persistent rent arrears).
- Get a professional rent valuation
- The court can determine all terms if parties cannot agree
Apply to court if necessary
If terms cannot be agreed, either party can apply to the County Court for an order granting a new tenancy on terms determined by the court. The application must be made before the deadline specified in the section 25 notice or section 26 request.
- Missing the court application deadline loses your right to a new tenancy
- Court determines market rent and other terms
Costuri
Avertismente importante
Strict time limits apply — missing the deadline for a court application loses your right to a new tenancy permanently.
Check whether your lease is contracted out before relying on renewal rights.
If the landlord opposes renewal on redevelopment grounds, you may be entitled to statutory compensation.