Commercial Lease Renewals
At Ashwell Rogers we have considerable experience in advising our clients on rental values, lease terms and rent free / capital incentives, along with acting as Expert Witnesses.
Our core areas of involvement are in central London offices and both high street and out of town retail throughout the country, although we welcome the challenge of more unusual properties as well. We advise a wide variety of clients from private individuals to property companies and major national and international companies, such as Sportsdirect.com Retail Limited, Global Asset Management, Silchester International Investors and Carillion Construction.
For more information please contact a member of our team
What is a Commercial Lease Renewal?
The expiry of a commercial lease offers both landlords and tenants the opportunity to consider whether they wish to agree terms for a new lease. Unlike a rent review, where it is simply the rent that needs to be agreed, there are a multitude of issues which need to be negotiated, such as the length of the term, the inclusion of break clauses and the detailed terms of any service charge as well as the level of the rent. Tenants and Landlords should be aware that at lease renewal the rent can go downwards, as well as up, if market conditions are appropriate.
Landlords typically prefer tenants to sign long-term leases as this guarantees the landlord a reliable stream of rental income and allows them to avoid the hassle and expense of re-leasing the space. On the other hand, Tenants often want shorter lease terms with break options to allow flexibility for future growth and expansion.
The statutory framework for lease renewals and lease terminations in England and Wales is set out in Part II of the Landlord and Tenant Act 1954, as amended, which generally provides security of tenure for a tenant – a statutory right to remain in occupation when their lease ends and to seek a new tenancy. However, the landlord may still oppose renewal on limited specific grounds, such as where the tenant has failed to pay the rent or meet other lease obligations, or the landlord has plans to redevelop the premises or to occupy them for its own purposes.
Conversely, where a lease is specifically excluded from the Landlord and Tenant Act 1954, a tenant will not have automatic renewal rights and will need to ensure that negotiations are commenced at an early stage to allow for the possibility of having to source alternative premises. Even where a lease is inside the Act, it should not be assumed that the existing lease will automatically come to an end at the stated expiry date as, if the tenant remains in occupation, the lease will continue to run until it is brought to an end by a formal Notice – either a Section 25 notice (served by the landlord) or a Section 26 request for a new lease (emanating from tenant).
If the landlord and tenant cannot agree on a new lease, an application can be made to the Court rather than to an Arbitrator or Independent Expert, and the Court will fix the terms of the new tenancy. Specific timetables and requirements apply for the service of any notice or application to the court and it is essential that these timetables are followed.
In addition to negotiating Lease Renewals, our Professional Department also has considerable experience in the following procedures:
- Assisting with the drafting of new leases
- Providing rental budgets
- Re-structuring leases
- Negotiating interim rents
- Compensation provisions
- Advising on the drafting of Rent Review clauses
|Retailers||Office Occupiers / Investors|
|Agnes B||American Institute of Foreign Studies|
|Arcadia Group||Carrillion Construction Ltd|
|Select Ladieswear||Consolidated Real Estate Management|
|Faith Shoes||Co-operative Insurance|
|Manon Cafe||Corporate Value Associates|
|Menkind||English National Ballet School|
|Pets At Home||Freshwater Property Management|
|Rohde Shoes||GE Real Estate|
|JJB Sports||Gracemark Investments|
|Mango||Gruss Asset Management|
|The Perfume Shop||Hay Group Management|
|Toys R Us||Horizon Asset Limited|
|Julian Graves||Media Square plc|
|Websters Pens||Reflex Business Space|
|Whittard of Chelsea||Specialist Schools & Colleges Trust|