Commercial Lease Renewal & Landlord and Tenant Act 1954 Solicitors

Expert Commercial Lease Renewal Solicitors

The expiry date in a commercial lease does not always mean that the landlord and tenant relationship automatically ends.

Where a business tenancy is protected by Part II of the Landlord and Tenant Act 1954, a qualifying tenant may have statutory security of tenure and a right to seek a new tenancy when the contractual term expires.

For landlords, this means that recovering possession may require more than simply waiting for the lease to expire.

For tenants, it means that an approaching expiry date does not necessarily require the business to leave.

At Knights & Shah Solicitors, we advise commercial landlords, tenants, investors and businesses on:

Commercial lease renewals

Landlord and Tenant Act 1954 protection

Security of tenure

Section 25 notices

Section 26 requests

Contracting out

Renewal negotiations

Renewal rent

Interim rent

New lease terms

Landlord opposition to renewal

Statutory grounds of opposition

Redevelopment and own-occupation grounds

Statutory compensation

Procedural deadlines

Court proceedings

Renewal documentation

Our objective is to establish the client's legal position early and manage the renewal strategically from the first notice through to completion of the new lease or termination of the existing tenancy.

What Is Security of Tenure?

Part II of the Landlord and Tenant Act 1954 provides qualifying business tenants with statutory security of tenure.

In broad terms, this means that a protected business tenancy does not necessarily end simply because the contractual term stated in the lease has expired.

The statutory framework can allow the tenancy to continue and give the tenant a right to seek a new tenancy, unless the tenancy has been validly contracted out or another relevant exception applies.

The Law Commission describes this statutory right to renew as security of tenure and confirms that most business tenants automatically have renewal rights unless the parties validly contracted out before the lease was granted.

Is My Commercial Lease Protected by the 1954 Act?

Whether a commercial tenancy benefits from the Act should be established from the particular lease and circumstances.

Relevant considerations can include:

• Whether there is a tenancy
• Whether the tenant occupies the premises
• Whether occupation is for business purposes
• Nature and duration of the tenancy
• Whether a statutory exclusion applies
• Whether the parties validly contracted out
• Whether the required contracting-out procedure was followed

Landlords and tenants should not assume that a lease is protected or excluded simply because of the wording used to describe it.

We can review the lease and supporting documentation to establish the position.

What Happens When a Protected Commercial Lease Expires?

Where Part II of the 1954 Act applies, the contractual expiry date does not necessarily bring the tenancy to an immediate end.

The statutory regime governs how the protected tenancy can be terminated and how a new tenancy can be sought.

This is one of the most important distinctions between a protected commercial lease and one that has been validly contracted out.

The parties should therefore establish the 1954 Act position well before the contractual expiry date.

Section 25 Notices

A landlord can initiate the statutory renewal or termination process by serving a Section 25 notice.

The notice can take one of two broad forms.

Landlord Willing to Grant a New Tenancy

The landlord may indicate that it is prepared to grant a new tenancy and propose terms for that renewal.

Landlord Opposing Renewal

Alternatively, the landlord may state that it opposes the grant of a new tenancy and specify the statutory ground or grounds relied upon.

A Section 25 notice must comply with statutory requirements.

Under section 25 of the 1954 Act, the notice will ordinarily need to specify a termination date and, subject to the statutory provisions, must generally be given not more than 12 months and not less than six months before that date.

Serving the wrong notice, relying upon an inappropriate ground or mishandling the timetable can materially affect the landlord's position.

Section 26 Requests

A qualifying tenant may initiate the renewal process by serving a Section 26 request requesting a new tenancy.

The request can propose matters including:

• Proposed commencement date
• Rent
• Length of new tenancy
• Other proposed terms

The landlord can respond and may oppose the grant of a new tenancy where a statutory ground is available.

The Section 26 procedure is therefore not simply an administrative request for an extension.

It forms part of the statutory renewal process and should be approached strategically.

Section 25 or Section 26?

The route used may depend upon which party takes the initiative.

A landlord planning the future management, redevelopment or reletting of a property may decide to initiate matters through Section 25.

A tenant wanting certainty about continued occupation may consider initiating renewal through Section 26 where available.

The appropriate approach depends upon:

Existing lease

Expiry date

Commercial objectives

Proposed renewal terms

Redevelopment plans

Future occupation plans

Negotiating strategy

Statutory timetable

Early advice can help ensure that the chosen procedure supports the client's wider commercial objective.

Key Commercial Lease Renewal Deadlines

Commercial lease renewals under the 1954 Act involve important procedural requirements and deadlines.

Parties should keep under review:

Contractual lease expiry

Date of any Section 25 notice

Date of any Section 26 request

Statutory termination or commencement date

Landlord's response to a tenant request

Negotiation timetable

Court application deadline

Any agreed extension of the relevant deadline

Allowing negotiations to continue does not mean that statutory deadlines can safely be ignored.

A landlord and tenant may be negotiating constructively while simultaneously needing to preserve their legal position.

For that reason, renewal dates should be diarised and monitored carefully.

Can the Renewal Deadline Be Extended?

In appropriate circumstances, the parties may agree in writing to extend the relevant deadline for making a court application.

This can allow negotiations to continue without proceedings being issued simply to preserve the parties' positions.

However, any extension needs to be handled correctly.

The parties should record:

Relevant deadline

Agreed extended date

Parties to the agreement

Effect of the extension

Where further time is needed, the position should be addressed before the existing deadline expires.

Negotiating a New Commercial Lease

Where landlord and tenant agree in principle that occupation should continue, the renewal process moves towards negotiating the new tenancy.

Issues can include:

• Rent
• Lease length
• Break clauses
• Rent reviews
• Repair
• Service charges
• Insurance
• Permitted use
• Alterations
• Assignment
• Underletting
• Guarantees
• Other lease terms

A statutory renewal does not necessarily mean that the old lease is simply copied and extended.

The terms of the renewal tenancy may require negotiation.

Renewal Rent

Rent is frequently one of the most commercially significant aspects of a lease renewal.

Landlord and tenant may negotiate the proposed rent with assistance from their professional advisers.

Where valuation is disputed, a commercial property surveyor or valuer may provide specialist market evidence.

Our role as solicitors is to advise on the legal renewal framework, documentation and proceedings where necessary.

We can work alongside the client's surveyor so that the legal and valuation aspects of the renewal are coordinated.

Interim Rent

The 1954 Act also contains provisions dealing with interim rent.

Interim rent can become relevant during the statutory renewal process and can affect the rent payable for the period between the relevant statutory date and the commencement of the new tenancy.

Whether interim rent applies and the appropriate amount depend upon the circumstances.

It should therefore be considered as part of the renewal strategy rather than left until the new lease has been finalised.

The Law Commission's current reform project specifically identifies the interim-rent process as an area under review, but those proposals have not changed the current law.

When Can a Landlord Oppose Lease Renewal?

Security of tenure does not give a protected tenant an unconditional right to a new lease in every case.

Section 30(1) of the 1954 Act contains seven statutory grounds upon which a landlord may oppose renewal.

In broad terms, these concern:

Ground (a) — Tenant's Failure to Repair

The landlord may rely upon the tenant's failure to comply with repairing obligations in appropriate circumstances.

Ground (b) — Persistent Delay in Paying Rent

Persistent delay in paying rent may provide a ground for opposition.

Ground (c) — Other Substantial Breaches

Other substantial breaches of the tenant's obligations, or relevant reasons connected with the tenant's use or management of the premises, may be relied upon.

Ground (d) — Suitable Alternative Accommodation

A landlord may oppose renewal where suitable alternative accommodation is available within the statutory framework.

Ground (e) — Uneconomic Subletting of Part

This ground can apply in particular circumstances involving a tenancy of part of a larger property where the landlord seeks possession for the purpose contemplated by the legislation.

Ground (f) — Redevelopment

A landlord may oppose renewal where it genuinely intends qualifying demolition, reconstruction or substantial works and satisfies the statutory requirements.

Ground (g) — Landlord's Own Occupation

A landlord may, subject to the statutory requirements and restrictions, oppose renewal where it intends to occupy the premises for its own business or as a residence.

Whether a particular ground is available depends upon the facts and evidence.

Landlords should therefore obtain advice before serving an opposing Section 25 notice or responding to a Section 26 request.

Redevelopment and Ground (f)

The redevelopment ground can be particularly important for commercial property investors and developers.

A landlord may wish to recover possession because it intends to:

Demolish the premises

Reconstruct the property

Undertake substantial works

Redevelop a wider site

The statutory test is more demanding than simply expressing a preference to redevelop.

The landlord's intention and ability to carry out the proposed works can become central issues.

Evidence may therefore need to be assembled well before the renewal dispute reaches court.

The Law Commission's 2026 consultation is examining possible reform of Ground (f), including how the existing test interacts with modern construction methods and Minimum Energy Efficiency Standards. Those proposals are not currently law.

Landlord's Own Occupation and Ground (g)

A landlord may also seek to oppose renewal because it intends to occupy the premises itself for its own business or, where applicable, as a residence.

Again, statutory requirements must be satisfied.

The availability of this ground should not be assumed simply because the landlord states that it wants the property back.

The ownership history, intended occupation and other statutory conditions need to be considered before reliance is placed upon the ground.

Tenant Breaches and Renewal

Existing breaches can become particularly important when renewal approaches.

Potential issues can include:

• Failure to repair
• Persistent late payment of rent
• Other substantial breaches
• Property-management issues

Landlords considering opposition should identify and document relevant breaches.

Tenants approaching renewal should likewise consider whether existing breaches should be remedied before the renewal process progresses.

Early action can materially affect the parties' negotiating and litigation positions.

Statutory Compensation

Where a landlord successfully opposes renewal on certain non-fault grounds, the tenant may be entitled to statutory compensation.

Section 37 of the 1954 Act provides for compensation in specified circumstances where a new tenancy is refused because of particular grounds, including grounds (e), (f) and (g), subject to the statutory requirements.

The amount can depend upon factors including the relevant rateable value and the qualifying period of business occupation.

This means compensation should be considered early where a landlord proposes to oppose renewal on redevelopment, own-occupation or another qualifying ground.

Contracting Out of the Landlord and Tenant Act 1954

Landlords and tenants can agree, before a qualifying tenancy is entered into, that the tenant will not receive the relevant statutory renewal protection.

This is commonly known as contracting out.

Specific statutory formalities must be followed.

For a landlord, contracting out can provide greater certainty that possession can be recovered when the contractual lease expires.

For a tenant, the consequence is significant because it will not ordinarily have the statutory right to insist upon a renewal tenancy.

The Law Commission confirms that most business tenants automatically benefit from renewal rights unless the parties validly contract out before the lease is granted.

Was the Lease Validly Contracted Out?

Where a landlord or tenant believes that a lease was contracted out, the underlying documentation should be checked.

This may include:

• Lease
• Statutory warning notice
• Tenant declaration
• Timing of the documentation
• Contracting-out wording within the lease

If the contracting-out process was not completed correctly, the legal position may be different from what one or both parties expected.

This can become particularly important when the contractual term approaches expiry.

What Happens If Renewal Terms Cannot Be Agreed?

Many lease renewals are concluded through negotiation.

However, disputes can arise over:

Whether the tenant is entitled to renewal

Landlord's opposition

New rent

Length of the new lease

Break rights

Repair obligations

Other lease terms

Where agreement cannot be reached, an application may need to be made under the statutory framework.

Parties should not assume that ongoing negotiations automatically protect them from procedural deadlines.

Court Proceedings

Where necessary, the court can determine issues arising from a contested renewal.

Depending upon the dispute, this can include:

• Whether a new tenancy should be granted
• Whether a landlord's ground of opposition is established
• Rent
• Duration of the new tenancy
• Other terms
• Evidence may be required from:
• Landlord
• Tenant
• Surveyors
• Valuers

Development professionals

Other experts

Where the dispute concerns rent or other valuation matters, specialist surveyor evidence can be particularly important.

Costs and Commercial Settlement

Court proceedings are not always the commercially preferred outcome.

Landlords and tenants may be able to resolve renewal issues through negotiation before final determination.

Settlement discussions can address:

Rent

Term

Break clauses

Repair

Surrender

Compensation

Timing

Other commercial terms

The appropriate strategy depends upon the strength of the parties' legal positions and their wider commercial objectives.

Renewal or Surrender?

Sometimes the most commercially sensible outcome is not a new lease.

A tenant may decide that relocation is preferable.

A landlord may prefer vacant possession.

The parties may therefore negotiate an agreed surrender or other exit rather than continuing with a contested renewal.

Where appropriate, renewal negotiations can be considered alongside alternative commercial solutions.

Our dedicated Surrenders & Terminations service deals with negotiated lease exits in greater depth.

Renewal and Redevelopment Strategy

For commercial landlords and developers, lease renewal strategy should be considered alongside future plans for the asset.

Questions may include:

Will the property be redeveloped?

When will vacant possession be required?

Are planning or funding arrangements sufficiently advanced?

Are multiple tenants occupying the development site?

Could protected tenancies affect the development timetable?

These issues should ideally be considered long before the occupational leases reach expiry.

Renewal Strategy for Tenants

For a tenant, renewal can be equally strategic.

The business should consider:

Importance of location

Fit-out investment

Customer base

Relocation cost

Alternative premises

Proposed rent

Length of commitment

Break flexibility

Future growth

A statutory right to seek renewal does not mean that renewal is necessarily the best commercial decision.

Our role is to explain the legal position so the business can make an informed decision.

Current 1954 Act Reform Position

The Landlord and Tenant Act 1954 remains in force.

The Law Commission published its second consultation paper on 16 June 2026, with the consultation closing on 16 September 2026.

Following its earlier review, the Commission provisionally concluded that the existing contracting-out model should remain. Its second consultation considers detailed modernisation of matters including:

• Qualifying tenancies
• Contracting out
• Renewal lease terms
• Interim rent
• Grounds of opposition
• Ground (f)
• Dispute resolution
• Possible greater use of ADR

The Law Commission will consider consultation responses before publishing its final report and recommendations.

These are proposals for reform.

They are not changes currently in force.

Our advice is based upon the law and procedures applicable at the relevant time.

How Knights & Shah Solicitors Can Help

We can advise commercial landlords and tenants on:

Reviewing existing leases

Establishing whether the 1954 Act applies

Security of tenure

Contracting-out documentation

Section 25 notices

Section 26 requests

Renewal deadlines

Extensions of statutory deadlines

Renewal negotiations

Renewal rent

Interim rent

New lease terms

Landlord opposition

Tenant breaches

Redevelopment grounds

Own-occupation grounds

Statutory compensation

Settlement negotiations

Court proceedings

Completion of renewal leases

Where a renewal becomes contentious, the matter can also be supported through our Commercial & Property Litigation practice.

Why Choose Knights & Shah Solicitors?

Landlord and Tenant Experience

We advise commercial landlords and commercial tenants, enabling us to understand the commercial considerations that commonly arise on both sides of renewal negotiations.

Strategic Renewal Advice

We look beyond the notice itself and consider how the renewal fits with the client's investment, development or business objectives.

Transactional and Litigation Support

We can advise on negotiated renewal documentation and coordinate contentious support where the renewal becomes disputed.

Commercially Focused Approach

Our objective is to identify the client's desired outcome and manage the statutory procedure in a way that protects that position.

Joined-Up Commercial Property Advice

Renewal matters can be coordinated with rent reviews, lease variations, surrenders, development strategy and wider commercial property work.

Based in Woking, Serving England

Knights & Shah Solicitors is based in Woking, Surrey and advises commercial landlords, investors, businesses and tenants across England.

Speak to Our Commercial Lease Renewal Solicitors

Whether you are a landlord considering renewal or redevelopment, a tenant seeking to remain in your premises, or you have received a Section 25 notice or Section 26 request, early advice can be critical.

Statutory notices and deadlines can materially affect your position.

Knights & Shah Solicitors provides commercially focused advice on commercial lease renewals and the Landlord and Tenant Act 1954, from initial strategy and statutory notices through to negotiation, settlement and court proceedings where required.

Contact our Commercial Property team to discuss your lease renewal.