Termination

Expiry of fixed term commercial lease - Tenant wants to go

Where a business property is occupied by a business Tenant for business purposes, it does not automatically come to an end at the end of the term ('the Contractual Expiry Date'). It continues by operation of law - the Tenant 'holds over' on a 'Statutory Tenancy'

Once the Statutory Tenancy has started, it can only be terminated by one of the procedures laid down in the Landlord and Tenant Act 1954.

If the Tenant wishes to leave at the Contractual Expiry Date, he needs to ensure that there is no period of holding over i.e. no statutory tenancy arises.  He has 2 courses of action

1.       Vacate the Property by the Contractual Expiry Date. The Tenant is no longer in occupation, he no longer has the protection of the Landlord and tenant Act 1954, he cannot hold over, no statutory tenancy arises.  Beware, however!

1.1.    If he stays a nano-second beyond the Contractual Expiry Date, he acquires the 'protection' of a Statutory Tenancy and then must serve at least 3 months notice to terminate it š paying rent and observing the obligations in the lease for that 3 months

1.2.    The Landlord may claim that he has not vacated if he leaves behind any stock equipment rubbish - anything at all that is not the Landlord's and then he will be caught for that 3 months!

2.       Serve on the Landlord a notice under section 27 of the Landlord and Tenant Act 1954 at least 3 months before the Contractual Expiry Date. The Tenant will have no continuing right of occupation š thus if he is a few days late leaving, it will not have the effect of automatically continuing the tenancy. However, he will be a trespasser and might be liable to 'double rent' so do not stay too long over.

Related topics you may find useful:

Commercial leases
Enfranchisement

Landlord/Tenant disputes
Service Charges

 

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