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David Ashton

Partner – Head of Commercial Property Department - Uckfield

7th January 2021

Commercial Lease Expiry: Protected tenancies and key tenant considerations

In the first two blogs of this series, we considered common queries for both landlords  and tenants when their contracted out commercial lease was coming to an end.

In the second half of the series we turn our attention to what it means for landlords and tenants when a tenant has the benefit of security of tenure under a protected lease and common questions that may arise as a result.

While a contracted out lease will require the statutory provisions of the lease and processes to be carefully examined prior to expiry/termination, the key difference with a protected lease is that once the term expires, tenants have the right to remain in the property and also renew their lease on the same terms as their old lease subject to any reasonable modifications. This is achieved either by the competent landlord (who may not be the tenant’s immediate landlord) serving a valid section 25 notice on the tenant, or by the tenant serving a section 26 request (the “Request”) on the competent landlord, and is also subject to any one or more of the seven statutory grounds the competent landlord may have for opposing the Request:

  • The property is in a state of disrepair;
  • There has been a persistent delay in paying the rent;
  • Other substantial breaches by the tenant;
  • Suitable alternative accommodation is offered;
  • The tenancy was created by a sub-letting;
  • The Landlord intends to redevelop the property;
  • The Landlord intends to occupy the property.

Although protected tenancies provide a renewal avenue for tenants, there are still a number of considerations for tenants that need to be taken into account prior to expiry of their current lease. Of particular note are procedural rules for preparing and serving the Request given that there are strict requirements for it to comply with the legislation in order to be valid. For example:

  • How soon before the end of the current lease must a Request be served?
  • What information needs to be included as part of a Request?
  • What happens if the landlord objects to a Request, and what is the deadline for doing the landlord doing so?
  • If no agreement can be reached, can an application be made to the court for a new lease to be granted? If so, when does this application need to be made?

Contact our commercial property lawyers in Brighton & Hove, Uckfield, Sevenoaks and Ashford

Due to the importance of serving a valid Request, it is crucial that tenants obtain legal advice as early as possible to ensure that the legislation is complied with in good time. If you have any queries or need advice on renewing your protected lease, please contact David Ashton e. davidashton@rixandkay.co.uk, t. 01825 745366 in Rix & Kay’s dedicated Commercial Property Team based in Brighton & Hove, Uckfield, Sevenoaks and Ashford.

 

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