Lease Renewals and Rent Reviews
Increasingly today, a landlord may decide to grant a business lease “outside the terms of the Landlord and Tenant Act”. Such a decision may be beneficial for the landlord and the tenant should seek advice on its/his/her position.
If the business lease is granted “within the act” then if you are a tenant, you need to consider whether you wish to stay on at the end of the term granted – or indeed if you wish to leave, then you need to seek advice as to the actions which you should take – and the timing of those actions which may otherwise cause you unlooked for expense.
As a landlord, you will need to give your tenant notice of at least six months to bring a lease to an end at the end of the term – or a later date dependent upon when you serve the notice! The notice needs to be in an appropriate form.
If, as a landlord, you are willing to agree renewal terms with your tenant again, the notice proposing those terms must be in the correct form.
Whether you are a landlord or a tenant, Gowen & Stevens can guide you through this process with its time limits and associated technical requirements.
Many leases today contain break clauses. These clauses may permit either the landlord or the tenant or sometimes both parties to terminate a lease before the end of the term. Considerable care needs to be exercised in successfully operating such clauses and you should always seek advice well before any notice date.
How a rent review operates will normally be clearly set out in the lease, but a landlord will generally need to give its tenant notice in advance. If the necessary procedure is not followed, the landlord may lose the opportunity to increase the rent, or the increase may be delayed.
As a tenant, you should seek advice if your landlord takes no action or is late in operating the rent review.
The landlord’s opportunity may be lost or alternatively, your landlord may be entitled to implement the review years later.