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As a tenant, if your commercial lease is due to come to the end of its contractual term, you may decide to renew it with a new lease on your lease terms. Perhaps you enjoy leasing the property you are currently in but want to negotiate a new rent amount. Also, you may want to avoid the hassle of searching for a new property and business tenancy. If you give the notice of lease renewal for your business premises with a Section 26 Notice, it is possible to withdraw your Section 26 request if you change your mind. However, how you do so and any implications will depend on the context. For example, the process will vary if a court is involved. This article will explore how you can withdraw a notice to renew a lease.
Renewing a Lease
Where your lease has a security of tenure, it is a protected lease. This means that at the end of the contractual term, it does not automatically end but instead continues on the same terms unless you or your landlord attempt to terminate it.
Notice to Renew a Lease
As a tenant, you must give your landlord a Section 26 Notice if you request to review your lease. You will need to comply with the legal requirements, for example, completing it in writing and addressing it correctly. There may also be set methods of delivering it, such as by post as specified in your legal agreement.
You can serve this notice before or after the contractual end term of your current lease. Either way, you must serve this before the day you wish to start a new lease to start. Furthermore, this must be at most 12 months or less than 6 months before the new lease start date.
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Withdrawing Notice
Although you may decide to serve a Section 26 Notice to renew your lease, you may naturally change your mind. Running a business is dynamic, and you may find that your circumstances change.
Before the Expiry of the Current Lease
You may withdraw your Section 26 Notice if you serve it before your current lease expires. A Section 26 Notice does not oblige you as a tenant to continue with the new lease. This is because the notice only triggers your renewal, and the law states that you can do this without any genuine intention to complete renewal.
If you wish to withdraw your Section 26 Notice:
- you can withdraw it at any stage of the process;
- you are under no obligation to take up the new lease;
- it does not matter if your landlord has already agreed to the new proposed terms; or
- if the court has made any decisions regarding the terms of the new lease.
However, there are a couple of essential points to note:
- you are still liable for your current lease until it expires, and this remains the case even if you decide to vacant the property earlier; and
- if your Section 26 Notice gives a date for your new potential lease to start which is later than the end date for your current lease, you are liable under your current lease until that date or an extended date if a court has agreed on one.
Court Proceedings and Orders
If you choose to withdraw your Section 26 Notice and you or your landlord has applied to the court for a new lease, the situation is slightly different. Where this applies, you do not require court permission and can ask the court to discontinue the proceedings. However, you should note that you may be liable for your landlord’s legal fees.
The court will order you to end your current tenancy when you discontinue proceedings. The end day will generally be 3 months and 21 days after you request discontinuance. The 21 days allow time to appeal.
Where a court has already made an order to allow a new lease and end the current one, you have up to 14 days to ask them to revoke it, which the court is obliged to do. Again the existing tenancy will continue for 3 months and 21 days, although the court can grant a longer time to allow your landlord to find new tenants.
Key Takeaways
If you have a lease agreement with your commercial property, it may be possible to request to renew it. You can do this with a Section 26 Order which grants you a new lease with new conditions rather than continuing on the existing lease. However, as this is simply a trigger to agree on a new lease, you are typically not bound to this. Therefore, you can withdraw it, assuming you have not reached the current lease’s end. However, the situation is slightly different when court proceedings or court orders apply to the potential new lease. Here, you will have to communicate with the court about your withdrawal which can involve strict timeframes, and you may incur your landlord’s legal fees.
If you need help understanding notices to renew a commercial lease, 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 for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
If your commercial property lease is protected, it will automatically renew at the end termination date with the same lease terms as your existing lease. If you wish to renew it with a new lease and negotiate new terms, you can inform your landlord through a Section 26 Notice.
If you give the notice to renew your commercial lease with a Section 26 Notice, this does not usually tie you to do so. This is because it is simply a trigger to negotiate a new lease rather than a commitment to any new lease.
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