A Tenant of a business lease has a statutory right to renew that lease at the end of the lease term if it satisfies the criteria as set out under the terms of the Landlord and Tenant Act 1954.
The terms of the new lease are to be agreed between the landlord and tenant and those terms need to be documented in a new lease. If no agreement can be reached, the terms of the new lease can be determined by the Court.
In order for the tenant to successfully claim entitlement to a new lease, the qualifying criteria set out in Section 23 of the Landlord and Tenant Act need to be satisfied and include the following:
- There must be a tenancy.
- The tenancy must relate to the premises.
- The tenant must occupy the premises for the purpose of their business.
If the tenant does not satisfy the criteria, they will not be entitled to a new lease pursuant to the terms of the Act.
We advise landlords and tenants as to whether they are entitled to automatic lease renewal rights and if those rights apply, we will seek to agree lease terms. If terms cannot be agreed, it may be necessary to serve a Section 25 Notice if acting on behalf of the landlord or alternatively, a Section 26 Notice if acting on behalf of the tenant.
Any notice needs to be served correctly and deadlines are imposed on both landlords and tenants after the Notice is served. It is important that time limits are complied with or applications to Court made if appropriate.