How To Negotiate A Commercial Lease Renewal

Generally speaking, you will find that most lease renewals are governed by the Landlord and Tenant Act 1954. That said, as a tenant looking to obtain the best arrangement for their business, this can be done when a commercial lease is due for renewal. In this blog we look at how you can negotiate a commercial lease renewal.

As a tenant, the first thing you need to do is notify your landlord. You need to make them aware that you want to renew your commercial lease with them. This needs to be done before the lease comes to an end. As a commercial tenants with a lease, you are protected by the Landlord and Tenant Act 1954. This means that you have the right to renew you lease and can do so by giving the relevant statutory notice to your landlord.

It is important to note that the landlord may choose to serve notice on the tenant when then rental term is coming to an end. No matter who serves the notice, the tenant must be aware of time limits. This ensures that they do not lose their right to renewal of the commercial lease. It also means that the tenant can avoid incurring any unnecessary costs.

Once notice has been served, the tenant is able to negotiate the terms of the renewed commercial lease with the landlord. As the tenant, you need to be aware that you may have to pay interim rent. This will happen while the new lease terms are being confirmed and approved.

If you have had a tenancy in the commercial property will minimal problems or disruptions on your part, this can put you in a very good position to negotiate favourable conditions in your commercial lease renewal terms. When looking at how to negotiate a commercial lease renewal, think about what you want to negotiate too.

For example, you may be able to negotiate a rent or service charge reduction. This is dependent on the current property market conditions. If these have changed since the initial commercial lease was agreed, then there could be room for manoeuvre. As a tenant, if you believe the rent on the property is too high, you can arrange for a surveyor to determine the market value of the property. This expert information could then be used to negotiate lower rates.

Another possible negotiation could be around the break clause. If your business is facing uncertain times, then a break clause could be fundamental. There will need to be specific conditions for a break clause to be undertaken. However, our commercial property lawyers can assist with this. You could also speak to the landlord to agree a commercial lease term that better suits your needs, as a tenant.

Need help with negotiating a commercial lease renewal? Contact our commercial property law specialists now. We will happily offer advice and guidance to get the best commercial lease for your business.