Commercial Leases: Security of Tenure

“The lease on our commercial premises is coming to its end and I am afraid that I will not be able to get another one, what can I do? “

Unfortunately commercial landlord and tenant law is very complicated and cannot easily be summarised. That said, and as a general rule, your options will depend on whether The Landlord and Tenant Act 1954 applies.

The Landlord and Tenant Act 1954

The Landlord and Tenant Act 1954 governs the rights and obligations of landlords and tenants of premises which are occupied for business purposes.  Where applicable the Act guarantees that the tenants have the right to:

  1. Stay in the premises at the end of their tenancy; and
  2. To also apply for a new lease to be granted.

If it assumed that the Act  applies to a business lease unless it has been expressly excluded. As such, it is very likely that you can not only stay in the premises but also apply for another tenancy should you wish.

The landlord can only object to a new lease for very limited reasons, including:

  1. Where you have a history of not complying with the lease obligations, such as failing to repair the premises and/ or non-payment of rent, or;
  2. Where the landlord provides alternative suitable premises
  3. Where premises have been split up by subletting into a number of units and the whole premises would command a higher rent if let together under one lease.
  4. Where the landlord intends to demolish and reconstruct the premises or
  5. Where the landlord requires the property back in order to occupy it themselves, or for development purposes,

It should be noted that the Act can only be excluded if it is done correctly but it is possible and there are some exclusions.

In Conclusion

In most cases, lease renewals are relatively straight forward and conducted against the background of these statutory rights without any need to apply to the courts. Even where a landlord does successfully object to the renewal, you may be entitled to compensation as a result. You may even be able to challenge the refusal through the courts.

Where you wish to apply for a new lease, or simply wish to challenge a refusal, there are strict deadlines that need to be adhered to. it is very important that you seek professional advice at an early opportunity.

As always, this advice is general in nature and will need to be tailored to any one situation. As a MILS member you have access to the MILS Legal advice line, as well as several industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate