Commercial lease renewals in Leicester

Business tenants whose leases are protected by the Landlord and Tenant Act 1954 have a right to a new lease when the old one ends, unless the landlord can establish a statutory ground for opposing it. If the lease was contracted out of the Act, there’s no automatic right to renew.

How it works

A protected lease doesn’t end on its expiry date. It continues until it’s brought to an end in one of the ways the Act allows. The usual start is a formal notice:

• Section 25 notice from the landlord, either proposing terms for a new lease or opposing renewal on stated grounds.
• Section 26 request from the tenant, asking for a new lease on proposed terms.

These notices have to be served between six and twelve months before the proposed termination date and must use the prescribed form. Once one has been served, strict deadlines apply to applying to court, although the parties can agree to extend them.

Negotiating the new lease

Most renewals are agreed without a court hearing. If you can’t agree, the court decides the terms, which tend to follow the old lease, with rent at market value. It’s worth getting a surveyor’s view on rent.

Landlord opposition

Landlords can oppose on grounds including redevelopment, wanting the premises for their own business, persistent late payment or poor repair. Where the ground is not the tenant’s fault, the tenant may be entitled to compensation based on the rateable value.

Contracted-out leases

If your lease is outside the Act, you have no right to renew. Start talking to the landlord well before the end date, and plan for the possibility of moving.

Common questions