The process of leasing commercial property is normally straightforward but there are occasions where difficulties can arise, particularly when it comes to a business lease covered by the Landlord and Tenant Act 1954.
Head of Commercial Property
Such leases benefit from enhanced security of tenure which will usually entitle a tenant to insist on a new lease when their old lease ends. The new lease should be on substantially the same terms, save for any reasonable updates the landlord may wish to make. Problems can arise where the landlord’s interpretation of ‘reasonable updates’ is a little too liberal.
This is the situation one of our clients found themselves in recently when they sought to renew the tenancy of their business. Handling the matter on their behalf was the head of our commercial property department, Deema Chudasama, who had to work hard to convince the landlord to be more realistic about what they could expect to achieve. As Deema explains
"This was an interesting case, because usually when a 1954 Act tenancy comes up for renewal the landlord will stick to the current lease terms and discussions around updating will ordinarily focus on the level of rent and length of term. However, in this case what the landlord sought to do was to present our client with an entirely new lease that was heavily weighted in the landlord’s favour. Our client was obviously alarmed by this as it was not what they were expecting.
Reading through the lease, it became obvious that the client could not be advised to sign it. The provisions governing their new obligations were extremely onerous, particularly for insurance which required the client to disclose anything an insurer might consider relevant and so simply could not be achieved.
Understandably the client was concerned about not doing anything to upset the landlord which could jeopardise their position. However, when it comes to 1954 Act renewals there is a statutory procedure that can be used to obtain a new lease and which leaves it to the court to determine the terms on which the lease ought to be granted. In my view the court would not agree to the form of lease the landlord was suggesting and therefore this could be used as a negotiating tool for encouraging the landlord to rethink their request.
The client agreed to let me try to negotiate a deal with the landlord which enabled some updating to happen but which did not result in the lease being completely rewritten. These negotiations ultimately paid off and we were able to agree new lease terms which everyone was happy with."
We Can Help
If you require help with a commercial property lease or any other commercial property matter, why not give us a call on 020 3551 8500 or use our Contact Us form to arrange a callback to see how he can help. You will not be charged for your initial call and most services we offer can be delivered for a pre-agreed fixed estimated cost.
Adrian undertakes all forms of commercial property work, including the sale and purchase of commercial premises, general portfolio management and non-contentious landlord and tenant matters, such as lease renewals, surrenders, the exercise of break clauses and the granting of licences to assign, underlet or carry out alterations.