Home » Lease Renewal Rights Advice

Lease Renewal Rights Advice

What lease renewal rights does a tenant have?  

If a tenancy benefits from security at tenure, when the contractual term of the lease comes to an end, a tenant can apply to the landlord for a new lease.

A lease may separately include an option for the tenant to renew the lease.

What is security of tenure?

Security of tenure is a statutory right that provides a tenant under a commercial business lease with an automatic right to renew their lease when this contractual term comes to an end, subject to certain exceptions.

This is sometimes referred to as contracting-out, due to there being a statutory procedure by which a tenant can ‘contract-out’ of this right.

Whether a lease is to have security of tenure should be negotiated by the parties in the heads of terms. As a rule of thumb the longer the lease the more likely it is to have security of tenure.

How does a tenant apply for a new lease if it has security of tenure?

A tenant can request a new lease by serving a notice on the landlord.

The notice has to adhere to strict requirements to be valid. These include that it must:

  1. be served not more than 12 months and not less than six months before the commencement date of the new business tenancy. The notice itself will specify the date.
  2. set out the proposed terms of the new lease. Usually the key terms will be appended to the lease.

If the landlord is happy to grant a new lease to the tenant on the terms set out in the notice, then the landlord can accept the notice and grant the new lease. If the landlord is not happy with the proposed new terms, then the parties can negotiate the new lease.

If the parties cannot reach agreement, then either party can make an application to court to determine the terms.

Alternatively, the landlord can oppose the grant of a new lease on certain statutory grounds. In order to do so the landlord must serve the prescribed form of notice on the tenant within two months of the tenant’s notice. The grounds on which the landlord can oppose a new lease include wishing to occupy themselves and that they intend to redevelop the property.

Deadlines in serving and responding to notices are strictly interpreted and it is therefore vitally important that a party adheres to these.

What happens if no notice is served by either party and a tenant remains in occupation?

The tenant will occupy under the terms of the expired lease.  This is commonly referred to as holding over and can last indefinitely.

If a tenant is holding over, it is likely that a landlord will serve notice to either instigate a new lease or to terminate the lease and oppose a new lease on prescribed statutory grounds.

This notice must be served no more than 12 months, nor less than six months before the termination date set out in the notice

If the landlord and tenant are unable to agree terms of the new lease, either party can make an application to the court for the terms to be ordered. As mentioned above, the landlord can oppose the grant of a new lease on certain statutory grounds, which must be specified in the notice if the landlord does not want to grant a new lease.

Why is this important

It is important that both the landlord and tenant know about security of tenure and the implications of for them as this ultimately involves the security of the tenant’s occupation and the control over the landlord’s property.

A landlord will want to retain ultimate control over their property. This may mean they do not want the tenant to have a statutory right to remain in the property at the end of the term. If a lease does not have security of tenure then any potential lease renewal is simply for the parties to negotiate without statutory protection.

A lease having security of tenure is beneficial for a tenant as it provides them with more bargaining power when negotiating a renewal and also would make an assignment of the existing lease more attractive to any potential assignee.

If you need any advice on lease renewal rights, please contact a member of our commercial property law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.

To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.

Contact Our Team
Catherine Burke
View Profile
Ciara O’Brien
Trainee Solicitor
View Profile
Donald Gray
View Profile
Elin Davies
View Profile
Elliw Jones
View Profile
Gareth Wedge
View Profile
Julia Bridge
Legal Director
View Profile
Lisa Evans
View Profile
Lorna Fraser
View Profile
Oliver Morris
Senior Associate
View Profile
Sarah Price
Senior Associate
View Profile
Stephanie Kendall
Trainee Solicitor
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee
Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper
ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale
Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth
Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani
Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb
Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel
Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams
Guarding UK Ltd

Darwin Gray have acted for myself and my company over a number of years and at all times we have been treated with a professional manner yet maintain a common-sense approach at all levels. We couldn’t recommend them more highly.”

Simon Baston
Loft Co

We have been clients of Darwin Gray for many years; they’ve always dealt with all of our legal matters with such professionalism. They work around us, even during awkward hours, and we feel confident we can always rely on them.”

Louise Williams
ACT Training

Darwin Gray has been acting for Siltbuster for more than ten years. We would have no hesitation in recommending Darwin Gray to other organisations small or large.”

Richard D Coulton
Siltbuster Ltd

From the very first conversation, I had no doubt that Darwin Gray should be the firm to receive our instructions on this matter. I would have no hesitation in recommending Darwin Gray.”

Sandra Warr
Tomos TV

We regularly instruct Darwin Gray. Their service in dealing with our transactional matters and disputes is always professional, prompt and efficient.”

John Poppleton
Absolute Property Management Solutions Ltd

Darwin Gray guided me through a long and extended process that would have been much more difficult had it not been for their patience and constant support.”

Ifan Lewis

Excellent and efficient service. Great result achieved, highly professional and transparent on pricing. Would recommend.”

David Stevens

Superb legal service provided. Exceeded expectations. They went above and beyond in order to provide the best service possible.”

Huw Pickrell

Very professional and understanding. They were a calming influence in a very troubling situation and they brought it to a very successful conclusion”

Rachel Jones

We have used Darwin Gray and have been seriously impressed. The personal approach is what Darwin Gray are excelling on and is the reason why we will continue to work with them in the future.”

Cadwyn Housing Association