Commercial Lease Renewals

COMMERCIAL LEASE RENEWALS

Under law, if a commercial or business lease has security of tenure, the tenant is entitled to apply to the court to renew his lease in case of failure to agree to a new lease by negotiation. This is subject to the landlord’s right to oppose renewal, he can do so on specified grounds, including redevelopment and own use.

A common problem with unopposed commercial lease renewals is that despite the landlord and tenant wanting to renew the lease they disagree on the new rent. There might be other terms of dispute but this is generally the main one. This can lead to endless negotiations unless one of the parties takes the initiative and either takes proceedings, or gets on with any existing proceedings. The natural reluctance to shell out money and the uncertainty the terms that the judge would decide is usually enough to encourage parties to reach agreement.

Opposed business lease renewals are more akin to adversarial litigation from the outset. The landlord wants possession and the tenant wants to renew his tenancy. Both parties need to assemble and prepare documentary and witness evidence. In some cases, such as renewals opposed on the ground of redevelopment, expert evidence is necessary.

There is a notice procedure that should be followed before any court application can be made for a new tenancy. The notices must be valid and served at the right time on the right person. Mistakes can lead to serious consequences.

We have a great deal of experience dealing with both unopposed and opposed commercial lease renewals. Some of our lawyers have for many years represented major property companies in obtaining possession of sites to allow for developments.

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