Can a Commercial Landlord Relocate Your Business?

When you enter a commercial property lease as a new tenant, you will generally expect to stay in the commercial property until the lease term ends. A fixed end date in a lease agreement can provide you with certainty that your business has a secure basis to establish its presence in the community. However, you find yourself in a situation where your commercial landlord forces your business to relocate to a different business property. This article considers whether a commercial landlord can relocate your business.

Can Landlords Relocate Commercial Tenants?

Strictly speaking, a commercial landlord cannot relocate your business during the lease term of your commercial lease. In some countries, landlords can insert a relocation clause in their commercial lease agreements that require tenants to relocate their business from their commercial property. 

However, despite a landlord being unlikely to relocate your business, there are instances where you may think a landlord’s actions mean you must relocate or where their actions cause you to relate. We explore these below. 

1. What Happens to a Commercial Tenant When the Landlord Sells the Commercial Premises? 

If a landlord is the owner of the commercial premises, they may decide to sell their property during your tenancy. Naturally, you may think you will need to relocate your business as your business premises will no longer be your commercial landlord’s property. 

Nevertheless, when you enter a commercial lease, you sign a lease agreement. If your landlord sells their commercial property, you will generally remain in the property as per your lease agreement and for the lease term. This is because a sale of land is a sale of the interest in the land. This means the sale occurs because the land or property includes a valid lease. 

Providing your lease began on or after 1 January 1996, your current landlord will usually still be liable for the lease obligations with any new landlord. However, there are some exceptions where:

• the landlord carries out the legal procedure to create an agreement to release them from the lease;
• you and your landlord negotiate their release; or
• your lease agreement contains a clause that details that when they sell, they do not remain liable for the commercial lease obligations

Cheat Sheet for Leasing Terms

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2. What Happens to a Commercial Tenant During a Lease Renewal? 

If you have a protected lease, but your landlord uses one of the legally reasonable grounds to refuse lease renewal, you may have to relocate your business. A protected lease means that when your lease term expires, you enjoy the legal automatic right to lease renewal. This means your lease automatically renews on the same conditions as the current one. You do not need to do anything for this to occur unless, of course, you wish to request different lease terms.

However, while you may have the automatic right to lease renewal as a commercial tenant, your landlord can refuse to renew the lease if:

• you breach your lease obligations;
• your landlord wishes to occupy their commercial property;
• your landlord wants to develop or demolish their commercial property;
• you did not fulfil your repair obligations in the lease;
• you pay your rent late;
• your tenancy is through a subtenant; and
• your landlord offers you alternative accommodation suitable for your business and on reasonable lease terms.

Key Takeaways

Your commercial landlord is unlikely able to relocate your business during your lease term. Even if your landlord sells the commercial premises, the new landowner generally undertakes the existing lease obligations. Nevertheless, if you have a commercial lease with security of tenure, your landlord may force you to relocate your business if they refuse to renew your lease based on legal grounds. 

If you need help with your commercial lease obligations, LegalVision’s experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.