Expert legal advice concerning lease terminations
The way in which a commercial lease is brought to an end will depend upon whether or not the tenancy enjoys security of tenure under Part II of the Landlord and Tenant Act 1954 (Act).
When bringing a business tenancy to an end, either as a tenant or a landlord, it is important that specialist legal advice is sought.
Lease terminations
Tenancies protected under the Act
Where the tenancy is protected under the Act, it can only be brought to an end using one of the prescribed methods. For the avoidance of doubt, termination of the lease in this context is different from bringing the tenancy to an end for the purposes of requesting a renewal tenancy.
To bring a protected tenancy to an end, the parties may either:
- Serve notice on the other party under Section 27 of the Act; or
- Agree a surrender of the tenancy (usually by deed).
In addition to the above, the landlord can also serve notice on the tenant under Section 25 of the Act to bring the tenancy to an end but oppose the grant of a new tenancy in certain prescribed circumstances.
Whilst there is no prescribed form of notice under Section 27, care must be taken to ensure that the notice does not expire within the contractual term of the existing lease and that the correct period of statutory notice is given. Failure to do so will make the notice invalid.
As to surrender, the landlord is still required to serve a notice on the tenant under Section 38A to deal with the consequences of Part II of the Act and, in certain circumstances, the tenant will be required to swear a statutory declaration to avoid the surrender deed being deemed to be void.
At Nelsons, our expert Property Disputes team are highly experienced in drafting and serving notices, deeds of surrender and statutory declarations that comply with the requirements of the Act. Likewise, we are experienced in identifying defects in such notices which can provide a tactical advantage during lease termination negotiations.
Non-protected tenancies
As a starting point, business tenancies which are not protected under Part II of the Act will automatically come to an end upon the expiration of the contractual team. If a tenant wishes to remain in occupation after this time, it is important that the parties understand what the status of the occupier will be so as to avoid inadvertently creating a protected tenancy. Within the term itself, parties are given much more flexibility to agree a surrender of the tenancy on agreed terms.
Surrender by operation of law usually occurs when the parties act in a manner which is inconsistent with the continuation of the business tenancy. Often this will involve some “positive” act on the part of one party, such as the tenant handing the keys to the premises back to the landlord.
A word of caution, though, that often regard will have to be given to all of the circumstances surrounding an alleged act of surrender before surrender by operation of law can be confirmed. It is therefore vital to take advice before acting upon such an act to avoid the risk of a claim of unlawful eviction.
How our solicitors can help with lease terminations
Our team in Derby, Leicester and Nottingham are specialists in all aspects of commercial tenancies and will be able to give you straight forward and realistic advice on bringing a business tenancy to an end.
Once you have got in touch with us, we can have an initial discussion with you regarding your circumstances to see how we may able to assist you going forwards. Of course, with commercial lease terminations there may also be queries about possible dilapidations liabilities, which we can also assist with.