What is a Commercial Tenancy at Will?

Businesses generally occupy commercial premises under a long-term commercial lease. However, a long-term commercial lease agreement is not the only legal means for a landlord to allow a tenant to use their building as their commercial premises. Alternatively, a commercial tenancy at will can exist, where the tenant can occupy the premises until either the landlord or tenant terminates the tenure at any time. This article will explain what is a tenancy at will. 

What is a Commercial Tenancy at Will?

A commercial tenancy at will is very similar to a commercial lease. A tenancy at will is where a commercial landlord grants a tenant exclusive possession of their commercial property to use as their business premises. In return, the tenant will pay their landlord rent, which cannot usually change in amount during the tenancy. 

The legal arrangement remains for the duration of the tenancy until one party terminates the tenancy, which they can do at any time. Given either party can terminate the tenancy at any given time, a tenancy at will usually last for a short period. 

How is a Tenancy at Will Different From a Commercial Lease Agreement? 

In a tenancy at will, there is no fixed term. This means there is no specific point when the tenancy ends. As a result, the duration of the tenancy is uncertain from the outset. Since a tenancy does not have security tenure, the tenant does not enjoy the automatic right of lease renewal. 

Additionally, unlike commercial leases, you cannot assign commercial tenancies at will to a third party. This is because the tenancy is personal to the landlord and tenant who created the tenancy together. 

Moreover, the tenancy does not usually require a guarantor, unlike a commercial lease. This is because if a rent dispute arises, the landlord can more easily terminate the tenancy than terminate a commercial lease.

Does the Tenancy Need a Written Agreement?

You do not need to detail a tenancy at will in writing. Instead, the parties can imply that a tenancy exists based on their respective behaviours. For example, if a commercial lease terminates, but the landlord agrees the tenant can remain in the commercial premises, we can infer a tenancy based on the parties’ behaviour. 

Where a tenancy at will arises and is not written, the same terms of the commercial lease usually apply. However, it is sensible to create a legal document to accompany any tenancy to ensure certainty about the terms and conditions.

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Does a Tenancy at Will Have Notice Requirements? 

Either party can terminate a tenancy at will at any point during the tenancy without notice. Nevertheless, a written tenancy can state otherwise. However, the landlord must allow the tenant reasonable time to take their belongings from the commercial premises. Where the landlord and tenant create a new lease for the same commercial property, the termination will occur automatically.

There are two ways a tenancy may terminate. These are by:

• express written notice; or
• by showing the intention of termination by taking certain actions, such as the commercial tenant leaving the premises.  

Key Takeaways

A tenancy at will is where a business owner has the sole occupation of a commercial property in return for rent.  Such a tenancy does not have an end-term date, meaning either party can terminate it at any point during the tenancy. Notably, the tenancy does not:

• require notice to terminate unless a written tenancy says otherwise; and
• allow you to assign the tenancy to a third party.  

If you need help understanding key points about a commercial tenancy, 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.