Commercial Lease Renewals

Under the Landlord and Tenant Act 1954 (LTA 1954), subject to certain exceptions, a business tenant has security of tenure which offers two key protections:

  • The tenancy will not terminate automatically after the lease comes to an end. It will continue on the same terms as the contractual tenancy until it is terminated in one of the ways specified in the LTA 1954;
  • The tenant has a statutory right to an entirely new lease that replaces the existing lease (commonly referred to as a lease renewal).

Some leases are not protected by the LTA 1954, for example, if the lease includes a clause to contract out of the security of tenure provisions of the LTA 1954.

Who can initiate a commercial lease renewal?

Either the landlord or the tenant can initiate the lease renewal procedure before the end of the contractual term or after the end of the contractual term if the tenancy is continuing under the LTA 1954.

The landlord can initiate the lease renewal procedure by serving a section 25 notice. The section 25 notice will end the tenancy between six and 12 months from the date of the notice and will indicate whether:

  • The landlord proposes a new tenancy; or
  • The landlord is opposed to a lease renewal.

The tenant can request a new business tenancy by serving a section 26 request. Service of a section 26 request will not oblige the tenant to take the lease. It is simply the trigger to initiate the renewal process. 

The LTA 1954 sets out strict format requirements and time limits. If they are not complied with, the right to renew the lease (or oppose its renewal) may be lost. We can initiate the lease renewal process on behalf of a landlord or tenant by preparing and serving the notice or request. 

When can a landlord refuse?

The landlord must grant a lease renewal unless there is a specific legal reason to oppose the renewal.

The landlord must notify the tenant of its opposition by serving either:

  • a section 25 notice if the landlord is terminating the lease; or
  • a counter-notice to a tenant’s section 26 request.

In both cases, the landlord must specify the grounds of opposition under section 30(1) of the LTA 1954. Examples of these grounds include:

  • The tenant is in persistent rent arrears;
  • The tenant has breached repair or maintenance obligations;
  • The landlord intends to demolish or reconstruct the premises;
  • the landlord intends to occupy the premises for the purpose of its own business.

We can act for landlords wishing to oppose a lease renewal by preparing and serving the appropriate notice or counter-notice on the tenant.

Can a tenant challenge a landlord’s opposition to lease renewal?

Once a landlord has expressed its opposition in a section 25 notice, or in a counter-notice to a tenant’s section 26 request, either the landlord or the tenant can apply to court:

  • The tenant can apply to court for a new tenancy and challenge the landlord’s grounds for opposition;
  • The landlord can apply to court for an order terminating the tenancy without renewal on any of the grounds for opposition contained in section 30 of the LTA 1954.

If the landlord fails to establish its grounds, the court will order a new tenancy.

If the court agrees that the landlord has established any of the grounds for opposition, the court will make an order terminating the current tenancy without the grant of a new tenancy.

We can act on behalf of a landlord opposing a lease renewal or a tenant challenging an opposition.

How are the terms of the new lease agreed?

The majority of the lease, if not all of it, will usually be negotiated by the landlord and the tenant without resorting to court. However, if the parties cannot agree, the landlord or the tenant can apply to court to determine the new terms of the lease.

Once the court has made an order on the new lease terms, a tenant will be bound to take the new lease unless:

  • the court revokes the order on the tenant’s application; or
  • the landlord and tenant agree in writing not to act upon the order for a new tenancy made by the court.

We can act on behalf of a landlord or a tenant in an unopposed lease renewal, by assisting negotiations and applying for a court order, if appropriate.

We’re with you, every step of the way.

We’re here to guide you through the intricacies of litigation, resolve disputes efficiently, and help you achieve your outcome.

Testimonials

Our team is composed of dedicated and accomplished legal professionals, each bringing their unique expertise to the table.

 
 
 
  
 
 
 
 Mustafa Kalaycı 
 
 
 Mustafa Kalaycı 
 
21/01/2024
 
 
  
The most honest, hardworking, and fully professional law firm I have encountered or worked with. Despite speaking different languages, they effectively understand you through their interpreters, find the best advisors to assist you, and acquire the necessary information. They create a friendly, family-like atmosphere with a straightforward approach, particularly in litigation expertise. My gratitude goes to all the staff involved, especially James Naylor and Jenny Cheung, for their dedication. Thanks for everything.  Mustafa KALAYCI
  
 
  
 
 
 
 Pauline 
 
 
 Pauline 
 
12/09/2023
 
 
  
I used Naylor Solicitors to help us purchase  our freehold. It wasn't as straightforward as we'd hoped as the previous freeholder and his solicitors were difficult to deal with (not responding to calls or emails etc,) which delayed things. At one point the freeholder threatened to pull out of the sale despite previously agreeing. Our solicitor Adam was swift in his response, reminding the other side that we had a verbal agreement and that they were risking us taking  legal action in that regard.  He was then able to make sure the sale went through as agreed.
I highly recommend Naylor Solicitors.
  
 
  
 
 
 
 Simon Grey 
 
 
 Simon Grey 
 
06/09/2022
 
 
  
We found Naylors after talking to a few solicitors and they sounded the most knowledgeable. They helped us with a neighbour dispute. Dominika was fabulous throughout, and we were able to resolve a long standing issue. We would like to thank Dominika for all her help and support.
  
 
  
 
 
 
 Simon Hill 
 
 
 Simon Hill 
 
09/04/2022
 
 
  
I was the main client contact of 60+ objectors on a breach of restrictive covenants case in Hertfordshire lasting several years. Naylors had been recommended by our QC and were superb throughout. We won the case convincingly. Would certainly recommend them.
  
 
  
 
 
 
 Farook Paracha 
 
 
 Farook Paracha 
 
07/01/2022
 
 
  
Dedicated and professional firm with the Clients interest at the forefront. Clear and unambiguous advice for a complicated legal matter expanding over several months. Naylor’s agreed to represent us  clients at a time when we had completely lost all hope from keeping our property safe from forfeiture. We couldn’t see the light at the end of the tunnel. Despite this we always felt confident and in control with the quality of advice and our legal cost. I would definitely recommend Naylor’s LLP to everyone I know. Special thanks to Dominika, Nikki & Jasper.
Regards
Farook Paracha
  
 
  
 
 
 
 Frazer A-F 
 
 
 Frazer A-F 
 
23/08/2021
 
 
  
We have been dealing with with Dominika Libova at Naylors for the past year on a dispute, we have been really pleased with the service she has provided. Dominika was approachable, friendly, professional and knowledgable, supporting us every step of the way. Fees were agreed in advance at every stage and where honoured, even reducing fees on a couple of occasions to meet the estimates. I would highly recommend Dominika and the Naylor's team.
  
 
  
 
 
 
 Yannick Schindler 
 
 
 Yannick Schindler 
 
01/06/2021
 
 
  
Dominika and her firm recently secured a good outcome for me in a property dispute and I highly recommend her. Whenever I spoke with Dominika on the phone, it was very clear to me that she had considered the matter very carefully and I was impressed with her attention to detail. I particularly valued her ability to respond very quickly and pragmatically to new, and sometimes unexpected, developments during litigation. She was also very skilled at developing strategies before and during litigation to achieve desired results while keeping costs low. Dominika made the impression of being a very adept and motivated litigator and throughout the entirety of the matter I was very, very happy to have her in my corner.
  
 
  
 
 
 
 claire bryant 
 
 
 claire bryant 
 
16/11/2020
 
 
  
From start to end our experience of Naylor solicitors and Dominkia in particular, was faultless. They are a very professional firm. Dominika was incredibly knowledgeable in this specialist area we sought advice in (ROL), listened and acted upon our wishes, but also was very helpful in guiding us in taking the right course of action. Communication was always timely without any delay and she always made the time to explain matters that we needed extra clarification over. I highly recommend.