When a commercial property lease comes to an end, most tenants will have the right to renew the lease. However, there are some exceptions. Most notably, if a tenant waived their right to renew when the lease was drawn up, they will not be entitled to remain in the business premises. If they do want to stay, the only option is to negotiate with the landlord. The automatic right to renew a lease is also denied to those who are business farm tenants, mining tenants, service tenants employed by the landlord and those on a fixed-term tenancy of six months or less. Even if the terms of the contract do incorporate the right to renew a commercial property lease, this can be revoked if the tenant breaks the conditions of the tenancy agreement. This might include, for example, failing to pay rent.
A landlord may also refuse the right to renew a lease if he or she needs the premises for their own use, or wishes to redevelop the property. Aside from these exceptions, a tenant will have the right to renew a commercial property lease. Nevertheless, there is a strict protocol that must be followed, as a tenant must request a new lease at least six months before the current lease expires. A landlord can oppose this request, but again there are certain steps that must be completed within a specific time frame. The tenant can challenge this opposition, although this can become a protracted process for both parties.
Therefore it is best to avoid a dispute by seeking early legal advice, well in advance of the leases’ expiry date. This will ensure that you take the correct course of action when renewing a commercial property lease, giving you the peace of mind that you will not have to change premises in the near future.
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