Top 10 Tips for a Commercial Lease Renewal

Posted by Colliers on 20th July 2022 -

If you are a tenant occupying business premises or a landlord that owns an occupied commercial property, it is likely that you have entered into a lease.

 A lease is a legally binding contract that gives the tenant the right to occupy and run their business from the premises for the period of the lease. When the lease term is close to expiring, the parties to the lease can enter into negotiations over the commercial terms of a new agreement which is referred to as a lease renewal.

1. Check if the lease is inside or outside the Landlord and Tenant Act 1954

Landlord and Tenant Act 1954 provides that, at the end of the term of a business tenancy, a commercial tenant has the legal right to remain in the premises and an automatic right to a new lease subject to Section 30.

If the lease is outside the Act, it will be expressly stated within the lease, and we would recommend that this is investigated early, at least 12 months before the lease expires. If you are unsure whether your lease is inside the Act, we recommend that you appoint a surveyor who can advise you.

2. If inside the 1954 Act:

The Act provides commercial tenants, throughout England and Wales, with an automatic right to renew their lease subject to Section 30 of the Act. If the renewal process is not triggered by either party, then the existing lease will continue until it is brought to an end by either party.

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