{"id":185943,"date":"2024-01-23T17:32:02","date_gmt":"2024-01-23T17:32:02","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=185943"},"modified":"2024-01-29T06:26:02","modified_gmt":"2024-01-29T06:26:02","slug":"new-terms-protected-lease-renewal","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/new-terms-protected-lease-renewal\/","title":{"rendered":"Negotiating New Terms During a Protected Commercial Lease Renewal"},"content":{"rendered":"\n<p>When you enter a commercial lease, you will negotiate lease terms.\u00a0Agreeing on the lease terms is essential before you, as a commercial landlord or tenant, sign the lease agreement.\u00a0If your lease is a protected lease, you may wish to reconsider the lease terms when it reaches the point of renewal. At this point, you can negotiate with the other party what you want to see in the lease terms of the lease renewal.\u00a0This article will explain negotiating new terms during a protected commercial lease renewal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Protected Lease?<\/h2>\n\n\n\n<p>If your commercial lease has security of tenure, it is what we call a <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/differences-protected-lease\/\">protected lease<\/a>.\u00a0This means it enjoys protection in law found in the <em>Landlord and Tenant Act 1954<\/em>.<em> <\/em>The Act&#8217;s protection is the legal right to automatic lease renewal once the commercial lease reaches its lease end term.\u00a0<\/p>\n\n\n\n<p>Therefore, instead of looking for a new tenant or new commercial premises, the parties to the lease can continue as they are.\u00a0You will know if you have a protected lease because where you do not, the lease agreement will state this and that both parties are aware and have agreed to this.<\/p>\n\n\n\n<p>Sometimes, a commercial landlord can refuse their tenant their automatic legal right to <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/renewing-a-commercial-lease-2\/\">lease renewal<\/a>. However, there are only seven legal grounds for this.\u00a0<\/p>\n\n\n\n<p>Where the commercial lease automatically renews, it must continue on the same or better lease terms by law.\u00a0Therefore, before the lease renewal, a tenant and landlord should consider whether they wish to change the lease terms and negotiate accordingly.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Negotiations&nbsp;&nbsp;<\/h2>\n\n\n\n<p>When a protected commercial lease reaches the point of lease renewal, it is crucial to be aware of the process so you can negotiate new terms where you wish to.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What?<\/h3>\n\n\n\n<p>When parties to a lease negotiate the lease terms, they need to consider what they can improve. If you are a tenant and have behaved well in the commercial property, you will be in an excellent position to negotiate your new lease terms.\u00a0<\/p>\n\n\n\n<p>For example, you may want to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a rent reduction, which, if you ask a surveyor to value the commercial premises at the market value, you have a strong chance of success;<\/li>\n\n\n\n<li>inserting a break clause as this provides you with some comfort if you are not sure you can commit to the lease renewal;<\/li>\n\n\n\n<li>a variance of the lease term so that your lease renewal means a longer lease term than the current shorter one.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Informal<\/h3>\n\n\n\n<p>Ideally, when your lease is about to renew, you negotiate new lease terms informally with the other party. This is often the quickest and easiest way to agree to new lease terms.\u00a0<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/05\/03024102\/LegalVision_UK-Supplier-Contracts-Checklist.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Supplier Contracts Checklist<\/div>\n            <div class=\"body-text\">\n                <p>Download this free Supplier Contracts Checklist to ensure your contracts will meet your business\u2019 needs.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.uk\/supplier-contracts-checklist.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<p>Chatting or writing to the other party to request and discuss this gives you room to negotiate, express your wishes and explain these.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Formal&nbsp;<\/h3>\n\n\n\n<p>Negotiating new lease terms informally is only sometimes possible, and if so, you must go through the statutory procedure.\u00a0This procedure varies depending on which party to the lease is proposing new lease terms.\u00a0<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>If you are the landlord and want to suggest new lease terms at the point of lease renewal, you serve a Section 25 notice on your tenant. You must do this from 12 months before the lease is due to renew to 6 months before that date. The notice will say that you agree to their automatic right to lease renewal but that you would like to do so with new terms and state what these are. Your tenant does not have to accept them, but you should discuss it with them if they raise an issue to avoid court action.<\/p>\n<\/div>\n\n\n\n<p>If you are the tenant wishing to propose new lease terms before lease renewal, you use a <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/section-26-notice\/\">Section 26 notice<\/a>.\u00a0You must serve this on your landlord similarly to a Section 25 notice, so any time from 12 months before the lease term end date to 6 months from it.\u00a0You can suggest the new lease terms on this. If, however, your landlord wishes to raise one of the seven legal grounds to refuse lease renewal, they must respond to you within two months of receipt of the notice.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Court Action<\/h3>\n\n\n\n<p>If you cannot agree to new lease terms that suit you both, you may need to resort to the courts for a decision.\u00a0They can determine points of the lease terms, such as rent and length of the lease.<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a 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Ideally, you will agree on new lease terms informally.\u00a0However, where you cannot, you may need to use a Section 25 or Section 26 notice.\u00a0Ultimately, a court must decide new lease terms where parties to a commercial lease cannot agree.<\/p>\n\n\n\n<p>If you need help negotiating new terms during a protected commercial lease renewal, LegalVision\u2019s experienced <a href=\"https:\/\/legalvision.co.uk\/leasing-lawyers-lp\/\">leasing lawyers<\/a> can assist as part of our LegalVision membership.\u00a0For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents.\u00a0Call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\">membership page<\/a>.<\/p>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/185943\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/new-terms-protected-lease-renewal\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Negotiating New Terms During a Protected Commercial Lease Renewal\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>When you enter a commercial lease, you will negotiate lease terms.\u00a0Agreeing on the lease terms is essential before you, as a commercial landlord or tenant, sign the lease agreement.\u00a0If your lease is a protected lease, you may wish to reconsider the lease terms when it reaches the point of renewal. At this point, you can<a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/new-terms-protected-lease-renewal\/\">Continue reading <span class=\"sr-only\">&#8220;Negotiating New Terms During a Protected Commercial Lease Renewal&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":3112,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"175486,173832,172535,181210,180720,181494","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[30],"tags":[20,61,1224,1511],"class_list":["post-185943","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-lease-property","tag-small-business","tag-commercial-lease","tag-commercial-tenant","tag-lease-renewal"],"acf":[],"yoast_head":"<!-- This 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Prior to her freelance writing work, Clare worked for UK central government in policy and communication roles. She has also run her own businesses where she founded a magazine and was editor-in-chief. She is currently studying part-time towards a PhD predominantly in international public law. 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