Business premises question:

If I take a short lease, will I be forced out of the property at the end of the tenancy?

posted in Business premises | 3 responses

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Responses:

Good Lawyer Guide's response

Not usually. A commercial lease automatically continues after the contractual term ends unless it is ended by either the tenant or the landlord by a legal notice being served. You will have a statutory right to request a new lease by serving notice on your landlord. This gives you ‘security of tenure’. The landlord has few grounds on which he can refuse and take possession of the property.

Before going ahead, make sure the lease doesn’t contain a ‘contracted out’ of security of tenure clause which will preclude you from entering a new lease on the property.

Praveen Chaudhari

Praveen Chaudhari's response

This will depend on whether or not the Landlord is requiring the lease to exclude section 24-28 of the Landlord and Tenant Act 1954 (the security of tenure provisions).

A good indication that a lease is contracted out of the security of tenure provisions is if you are required to make a declaration (or statutory declaration) confirming that you have had notice that sections 24-28 of the Landlord and Tenant Act 1954 are excluded from the Lease.

Otherwise you will have security of tenure and will be entitled to a new lease on the same terms as the existing lease (subject to rent review and updating).

Please note there are limited to circumstances where you have security of tenure but the Landlord can still refuse a new lease.

Daniel Stanton

Daniel Stanton's response

If the lease is NOT contracted out (see answers above), the grounds on which a landlord may oppose an application for a new lease must be set out in the Landlord's notice at the end of the lease, if the Landlord chooses to serve one. The notice can be served at any time but must not expire before the end date in the lease nor less than 6 months nor more than 12 months before it takes effect.

(a)where you are liable to repair and the property isn't in good repair at the end of the lease because of your failure to comply.
(b) where you have persistently delayed in paying rent.
(c)where you have substantially breached the other terms of your tenancy or you've generally been a 'bad tenant'.
(d)where the landlord can provide alternative premises on reasonable terms.
(e)where you sublease part of a property and the landlord can get less rent than he can for the whole, or the landlord needs to dispose of the whole property.
(f)where the landlord intends to demolish, reconstruct or refurbish the premises.
(g)where the landlord intends to occupy for his own busines or residence.

Where the landlord looks to end the lease on one of the 'no-fault' grounds, there may be a liability to pay compensation to the tenant.

The above paraphrases the grounds set out in section 30(1) of the Landlord and Tenant Act 1954 and is not a substitute for comprehensive legal advice on your situation at the end of the lease.