My lease is ending. Can I renew it?
Yes – if your tenancy is for a fixed term of more than a year, or your tenancy is for a fixed initial term and then from year to year. If the landlord gives you notice of termination, you can apply to the court for a new tenancy. The landlord can oppose renewal on one of a number of specific grounds. There is no right to renew where you entered into a valid agreement with your landlord to exclude security of tenure, before taking out the lease. An agreement entered into before 1 June 2004 must have been authorised by the court.
What rights do I have to renew my tenancy?
Most commercial lettings are governed by the Landlord and Tenant Act 1954 Part 2. This Act gives tenants an automatic right to renew their lease upon expiry, except in the circumstances set out below. provided the provisions of the Act have been followed and the tenant is not in breach of the covenants contained in the lease.
Can the landlord prevent me renewing my tenancy?
The Act enables the landlord to oppose renewal where the tenant is in breach of the covenants (obligations) in the lease. It also gives the landlord very limited grounds to oppose renewal where the tenant is not “at fault”: for example where the landlord requires the premises for his/her own use. Furthermore, you will not have any rights to renew your tenancy if you have entered into a valid agreement with your landlord to exclude security of tenure. For such an agreement to be valid, the following steps must normally have been followed:
- leases before 1 June 2004: the agreement must have been authorised by the court on the joint application of the landlord and tenant, before the lease was agreed;
- leases on or after 1 June 2004: the tenant must receive a warning notice about the implications of agreeing to give up renewal rights, normally at least 14 days before agreeing to the lease (or entering into an earlier legally binding agreement to take on a lease). The tenant must also sign a declaration that he or she has read the notice and has accepted its consequences. In cases where 14 days’ notice has not been given, this must be a “statutory declaration” made before an independent solicitor.
Giving up renewal rights gives the landlord a right to possession when the lease expires. You will have no statutory rights to compensation when you leave the tenancy.
How do I go about renewing the lease?
It would be advisable to obtain professional advice. You must give notice to the landlord using a special form. The form of these notices is laid down by the law in Regulations called “The Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004” (Statutory Instrument 2004 No. 1005). The Regulations may be found at:
www.legislation.hmso.gov.uk/si/si2004/20041005.htm The forms may be bought from law stationers. Strict timetables are specified in the Act for serving these notices.
For further details about renewing business tenancies, see Renewing and ending business leases: a guide for tenants and landlords. (Paper copies are available from the Free Literature, PO Box 236, Wetherby, West Yorkshire, LS23 7NB, Tel: 0870 1226236, Fax: 0870 1226237.)
What is an interim rent?
Where a lease is being renewed under the provisions of the Landlord and Tenant Act 1954 Part 2, the landlord or tenant can apply to the court for an interim rent to be set that will apply until the beginning of the new tenancy. Normally, this will be based on the rent for the new tenancy, but in some cases it may be set differently. The rules on interim rent are designed to be fair to both parties, but they are complex so it is best to seek professional advice.
The landlord requires me to pay his legal costs upon the grant of a new lease. Can he do this?
This is very much a matter for negotiation. As far as the renewal of an existing lease is concerned, the Costs of Leases Act 1958 states that if you do not agree to pay your Landlord’s legal costs then that is the end of the matter. But if you have lost your statutory rights under the Landlord and Tenant Act 1954 Part 2 – e.g. by not responding to notices within the time limits, or by contracting out – your position may have been weakened.
How much will it cost me to negotiate a new lease for me?
See if a figure is mentioned in your lease. A landlord can only claim his/her reasonable actual costs and should not seek to make a profit from the request for consent.
On what grounds can the landlord oppose the grant of a new tenancy?
Only on one or more of a limited number of grounds. Examples are cases in which the tenant has failed to comply with his obligations, or been persistently late in paying rent, or where the landlord wishes to use the premises for his/her own business or residence. The grounds are set out in full in section 30(1) of the Landlord and Tenant Act 1954 Part 2 (as amended by the Regulatory Reform (Business Tenancies)(England and Wales) Order 2003, Statutory Instrument 2003 No. 3096), and in Appendix 3 to Renewing and ending business leases: a guide for tenants and landlords. (Paper copies of the latter are available from the Free Literature, PO Box 236, Wetherby, West Yorkshire, LS23 7NB, Tel: 0870 1226236, Fax: 0870 1226237). A landlord does not need to prove any of these grounds where the court has authorised the exclusion of security of tenure.