Tenant's right to renew a commercial property lease
Which tenants have the right to renew their business property lease and which don't.
There are types of business property and commercial leases where tenants have the right to renew their lease when it comes to an end. There are also circumstances where business lease renewal rights do not apply.
Who has the right to renew a lease?
Business tenants normally have the right to remain in their business premises and renew their commercial property leases when their tenancy agreement ends. Examples of commercial property where these rights may apply include:
- shops, warehouses, and factories
- offices containing businesses, professional people, and volunteer societies
- doctors' and dentists' surgeries
- premises for clubs, trade unions, institutions, and other bodies
- premises used partly for business, but where the tenant lives in the remaining areas
Who doesn't have the right to renew a lease?
However, some types of business occupiers do not have the right to renew a commercial property lease including:
- farm business tenants
- mining tenants
- 'service tenants' employed by the landlord
Also, business property lease renewal rights do not generally apply in the following circumstances:
- fixed-term tenancies of six months or less
- tenants who waive their right to renew at the start of their lease
- tenants using the premises for business without the landlord's agreement
- where there is a license rather than a lease
- where tenants have already extended long leases and, in certain cases, their sub-tenants
- tenants who have sub-let the premises and who are not occupying them personally
The landlord may also oppose the renewal of a business lease in certain defined cases - see the landlord's right to refuse a new tenancy.
Legal advice for commercial property leases
You may want to consult a legal professional on the issue of business leases. Choose a solicitor for your business.