Commercial Lease Extension

The extension of a commercial lease refers to the process by which the existing lease agreement for a commercial property is extended beyond its initial term. It allows the tenant to continue occupying the premises and conducting their business activities for an additional period of time.

There are legal complexities involved in the process of renewing a commercial lease, and specific timeframes and requirements must be adhered to. Seeking legal advice from a solicitor experienced in commercial property law is strongly recommended to navigate the process effectively and ensure compliance with relevant legislation.

Are you looking for a solicitor to renew or extend your commercial property lease? Call our fixed-fee commercial lease solicitors in London on 020 3417 3700.

No matter where your commercial property is, our commercial lease solicitors provide legal services regarding the renewal of commercial leases throughout England and Wales.

Table of Contents

1. Commercial lease extensiton
2. How to extend your commercial lease?
3. What is the difference between a Section 25 and Section 26 notice?
4. What is the process of a commercial lease extension?
5. What do commercial property solicitors do?
6. How much does it cost to extend a commercial lease?
7. How much do solicitors charge for the extension of a commercial lease?
8. Why choose Wembley Solicitors for a commercial lease agreement?
9. Frequently Asked Questions (FAQs)
10. Need Legal Advice & Assistance?

How to extend your commercial lease?

To extend a commercial lease, the tenant must serve a formal notice to the landlord, known as a Section 26 notice or a Section 42 notice, depending on the circumstances. The specific notice required will depend on whether the tenant wants a new lease with different terms or wants to continue the existing lease terms.

The landlord then has the opportunity to respond by either accepting the tenant's request, negotiating new lease terms, or opposing the renewal based on specific grounds specified in the Act. If the landlord opposes the renewal, the tenant may have the right to apply to the court for a lease renewal.

What is the difference between a Section 25 and Section 26 notice?

Section 25 and section 26 refer to the relevant parts of the Landlord and Tenant Act 1954. Where a landlord initiates a lease renewal, this is done by serving a section 25 notice on the tenant using the prescribed process. On the other hand, if a tenant wishes to serve notice to their landlord that they wish to renew their commercial lease, they must use section 26.

The correct process defined in the Landlord and Tenant Act 1954 must be followed when serving notice. A commercial property Solicitor will ensure that the correct process is followed when you are renewing your lease to ensure your legal position is protected.

What is the process of a commercial lease extension?

The process of renewing a commercial lease in the UK generally involves the following steps:

1. Review the existing lease
2. Serve a Section 26 or Section 42 notice
3. Wait for the landlord's response
4. Negotiations
5. Lease renewal agreement
6. Finalise the commercial lease

1. Review the existing lease

The tenant should review the terms and conditions of the current lease to understand its expiry date, any renewal provisions, and the notice period required for renewal.

2. Serve a Section 26 or Section 42 notice

If the tenant wants to renew the lease with the same terms, they must serve a Section 26 notice to the landlord between 6 and 12 months before the lease's expiry date. If the tenant wants to negotiate new lease terms, they must serve a Section 42 notice. This notice should specify the desired terms and propose a new lease.

3. Wait for the landlord's response

Upon receiving the notice, the landlord has a specific timeframe to respond. If the landlord agrees to the renewal and terms proposed in Section 26 or Section 42 notice, the lease can be extended accordingly. If the landlord disagrees or wants to negotiate new terms, discussions, and negotiations between the tenant and landlord may take place.

4. Negotiations

The tenant and landlord negotiate the terms of the lease renewal, including rent, lease length, repairing obligations, and any other relevant clauses. It's advisable for both parties to seek legal advice during this stage to ensure their interests are protected.

5. Lease renewal agreement

Once the parties have reached an agreement, the new lease terms are documented in a lease renewal agreement. This document should be prepared and reviewed by solicitors for both the tenant and landlord.

6. Finalise the commercial lease

Once the lease renewal agreement is finalised, both parties sign the new lease to formalise the extension. The signed lease is then registered with the Land Registry (if required).

What do commercial property solicitors do?

Our commercial lease solicitors in Wembley, London can handle all aspects of your commercial property lease renewal, whether you are a landlord or tenant, including:

• Checking if you have the security of tenure as a tenant
• Assisting if your landlord is opposing your lease renewal
• Reviewing and updating your commercial lease terms
• Handling disputes between landlords and tenants preventing lease renewal, including matters relating to disrepair or another breach of covenant – using alternative dispute resolution (ADR) such as mediation or by applying for a court order
• Serving a Section 25 or Section 26 notice
• Explaining the requirements for a guarantor when a lease is being renewed

No matter how complex or urgent your commercial lease renewal is, our Solicitors can represent you. As a full-service law firm, we can also advise you regarding any other legal matter including in the areas of litigation, immigration, and criminal law.

How much does it cost to extend a commercial lease?

The cost of renewing a commercial lease can vary depending on several factors, including the complexity of the negotiations, the involvement of legal professionals, and any additional expenses related to the lease renewal process.

Here are some potential costs to consider:

• Legal fees: Both the tenant and the landlord should seek legal advice from a solicitor experienced in commercial property law. Our solicitors charge a fixed fee from £1000-£1500 (Plus VAT). The complexity of the lease renewal process and negotiations can affect the legal costs involved.
• Surveyor fees: Depending on the terms of the lease and the condition of the premises, it may be necessary to involve a surveyor to assess the property's condition and negotiate rent or repair obligations. Surveyor fees will vary depending on the scope of work required.
• Valuation fees: In some cases, a valuation of the property may be necessary to determine the market rent for lease renewal negotiations. Valuation fees will depend on the complexity and nature of the valuation required.
• Stamp Duty Land Tax (SDLT): SDLT may be applicable if there are changes to the lease terms, such as an increase in rent or lease length. The amount of SDLT will depend on the specific circumstances and the rates set by the government at the time of the lease renewal.
• Land Registry fees: If any changes are made to the lease terms, such as adding or removing clauses, it may be necessary to register the new lease with the Land Registry. Fees for registration will depend on the value of the lease.

The costs associated with renewing a commercial lease can vary significantly depending on the specifics of each situation. It is recommended to consult with legal professionals and other relevant experts to get a clearer understanding of the potential costs involved in a particular lease renewal scenario.

How much do solicitors charge for the extension of a commercial lease?

At Wembley Solicitors, we offer affordable commercial property lease related services on a fixed fee basis with no hidden costs or nasty financial surprises.

Our commercial lease solicitors charge a fixed fee in the region of £1000-£1500 (Plus VAT) for complete legal services regarding the renewal of commercial property lease.

Why choose Wembley Solicitors for a commercial lease agreement?

Frequently Asked Questions