Lease Renewals and Rent Review

Rent reviews If you're a landlord of business premises, the lease may allow you to increase the rent every so often. Usually, the lease fixes the date when a rent review can take effect and you have to give the tenant notice some time in advance. Be prepared! Check when the notice has to be given, and what it has to say, and consult your solicitor in plenty of time. If you get the procedure wrong, or leave it too late, you may not be able to increase the rent, or the increase may be delayed.

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If you’re the tenant, the lease probably doesn’t allow you to propose a reduction when the rent review is due, but ask us to check it just in case. If the landlord writes or speaks to you about the rent review, don’t agree to anything till you’ve had a chance to get legal advice.

Get advice too if the rent review date passes and the landlord hasn’t taken any action. The landlord may have missed the chance of an increase – or may be entitled to review the rent years later, and charge you the difference retrospectively. You’ll want to know which way it is.

Business lease renewals

If a business lease doesn’t exclude the Landlord and Tenant Act 1954, the tenancy will continue after the lease expires unless you do something about it.

If you are the tenant, and you don’t want to stay on, you must move out before the lease expires. Otherwise, unless the landlord takes action, you may go on being the tenant till you have terminated the tenancy by 3 months’ notice.

If you are the landlord, it takes at least 6 months’ notice, expiring at the end of the lease or at a later date, to bring the tenancy to an end, whether you are willing to renew it or not. The notice has to be in the proper form, not just a letter. If you are willing to renew the lease, the notice has to propose terms. If you do not want to renew it, the notice has to say why, and the reason has to be one of those listed in the Act.

Whether you have received a notice to end a business lease or you are thinking of giving one, it is vital to get good legal advice as soon as you can. There are time limits that must be met, and technicalities that it is easy to get wrong.

Tenancies outside the 1954 Act

If a business lease validly excludes the 1954 Act, it expires when it says it does. The landlord can renew it but is not obliged to – and the tenant becomes a trespasser as soon as the lease expires.

Whether you are the landlord or the tenant, it’s wise to get legal advice before the lease expires. If the correct procedure to exclude the Act was not followed, the tenant may be protected by it, and the lease may not come to an end. You both need to know where you stand.