When your commercial lease expires, your tenant will usually no longer have the right to occupy your property as their commercial premises. Therefore, you will expect your tenant to leave the property vacant. This will allow you to lease it to another tenant as a new tenancy or to move on to other plans, such as to carry out works on your commercial property. However, a tenant may remain in your property after the commercial lease expires. This article will explain what you can do if your commercial tenant remains in your property after your lease expires.
This cheat sheet outlines what you should be aware of in your lease agreement.
When Does a Lease Expire?
Your commercial lease with your tenant will expire when you contract out or have a non-protected lease. The lease will end once it reaches its contractual or lease term end date. This is the date you initially agreed with the tenant to lease the property from you. After this date, your tenant should no longer occupy the premises and has no legal right to do so unless you both negotiate a new lease. They also have no right to a new lease.
What Happens After Expiration?
If you have a non-protected commercial lease, you may find yourself in a situation where your tenant remains after the lease term date. From this point, they do not have a legal right to stay on the premises and should vacate.
If they do not vacate the property, there are actions you can take, but these depend on the legal status of your tenant, which will either be as a:
- tenant on sufferance;
- tenant at will; or
- periodic tenant.
We unpack these scenarios below.
After the expiration of the commercial lease, your tenant might become a trespasser by staying on the property. To recover possession of your property, you should write to them stating that they are trespassers. In the letter, you should demand immediate vacant possession. If this is unsuccessful, you can try to gain possession through the County Court, where you file for a possession claim.
Tenant on Sufferance
Your tenant can become a tenant on sufferance after the commercial lease expires. This is a kind of tenancy that exists through operation by law, meaning it is not something you expressly agree to form. In this situation, your tenant remains on your property where the commercial lease expires, but you still need to clarify whether you wish your tenant to remain.
If you do not want to grant a new lease, clarify this to the tenant as soon as possible. You should recover possession of your property through possession proceedings. This means through the County Court with a possession claim. Although you do not first need to demand possession directly from them, it is advisable to do so.
Tenant at Will
Where your tenant remains in the property post-lease expiration, but you have begun negotiating with them about the possibility of a new lease, they are legally a tenant at will. If you change your mind about a new lease and no longer wish them to remain in the property, you must let them know and can terminate the tenancy immediately.
Your tenant may become a periodic tenant if they remain in your commercial property once the lease expires and you have not taken any action regarding their occupation. Therefore, you have yet to negotiate a lease or demand possession. Instead, you are both continuing the landlord and tenant relationship. The likelihood of this scenario will increase if, in their continued occupation, you take rent payments from them.
To prevent the occurrence of this situation and to remove the tenant from your property, you should:
- issue a letter in which you demand possession; and
- put a rent stop in place to stop the situation from becoming a tenancy at will.
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If your tenant remains in your property after your commercial lease expires, there are a few actions you can take. The first step is to give your tenant written notice that the lease is ending, and they must vacate the property after the end date. If they remain, they may become a trespasser on your property. In this scenario, you can claim possession through the County Court.
If you need help understanding what to do if your tenant remains after your commercial lease expires, our 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. Call us today on 0808 196 8584 or visit our membership page.
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