Commercial Property
If you are running a business in premises which you have rented for more than 6 months you are likely to have the protection of the Landlord and Tenant Act 1954. The purpose of the Act is to ensure that tenants who have built up goodwill by trading in a particular place do not automatically have to move out when their lease comes to an end and so possibly lose the benefit of that goodwill.
In order to qualify you do not even have to have a lease, and the definition of what constitutes a business is very wide.
If your landlord wants to take the premises back he has to initiate a procedure laid down in the Act. If he has not done so at least 6 months before your lease is due to end you can continue to occupy the premises until the landlord does give you written notice. That notice must give you at least 6 months.
The notice must say whether the landlord wants you to leave or whether he will give you a new lease. If he says that he is not prepared to renew the lease, he must also say why. The grounds for refusal can only be one or more of those laid down in the Act. The most important of these are:
- failure to pay the rent on time
- failure to comply with obligations such as to repair
- that the landlord wants to redevelop the site and could not do so while you as the tenant are still there
- that the landlord wants to use the premises for his own business
The rent you pay under the new lease will be the market rent (fixed by the County Court if you and the landlord cannot agree what that should be).
The only way in which your right as a tenant to renew your lease can be removed is by going through a procedure, set out in a statutory instrument which came into force on 1st June 2004, that has to be carried out by the landlord and the tenant jointly and before the lease starts.
This is an area where professional help is important. It is easy to lose the protection of the Act because time limits are missed.