Various factors help in determining how a lease of any business premises could be ended. You need to consider important questions like who is interested in ending the lease, if the lease term is over or is it going to be terminated much before its natural end of term. Other vital things to consider are if the tenant is breaching the lease contract and also, if the business lease is a genuine one in keeping with the Landlord and Tenant Act 1954.
It is pretty obvious that ending any business lease would bring many legal issues that require professional help from expert lawyers. Tenants and landlords would be requiring practical advice regarding the effect and binding of the 1954 Act on their lease contracts. They need to learn about tactics to accomplish their goals of either evicting an unwanted tenant or quitting a lease early or carrying on with a business lease without taking into account the landlord’s disapproval and opposition.
Identifying an Authentic Business Lease
You must concern yourself with establishing the fact that you have a genuine business lease. The 1954 Act, Part II, is applicable to any tenancy in which the property in question is occupied by the tenant for business purposes. You must note that there is a possibility that the parties involved might have agreed already that 1954 Act would not be applicable to their lease contract. You need to check out if the lease is as per the right contracting procedures. If 1954 Act is not applicable, the lease would be continuing automatically till the term comes to an end naturally.
A Tenant Ending a Business Lease
It is not compulsory for a tenant to agree to the continuance or extension of his tenancy. He is free to serve a notice for quitting, which is subject to certain time limits. He may otherwise consider relying on his specific break clause, wherever suitable. He is free to choose to vacate before the original fixed term expires, ending his liabilities and the lease on that particular date.
If tenancy of the business premises has continued even post expiry of the term and if the tenant is wishing to get out of the lease, he could simply serve three months’ notice to his landlord. Other viable options that a tenant could choose from are negotiating to surrender the lease or assigning the business lease to some other person.
A Landlord Ending a Business Lease
A landlord needs to use a break clause to quit a business lease early. He may quit early if he comes to an agreement of surrender with his tenant or if he is seeking to forfeit the business lease with the excuse that the tenant has failed in fulfilling his obligations as per the lease contract.
Another option open to the landlord in quitting the lease early would be serving a Section 25 Notice as per the 1954 Act’s specified time limits, stipulating a termination date post expiration of the actual or original tenancy, and also, stating the statutory or legal grounds behind the landlord’s opposition to renewal.
These statutory grounds would certainly be including the tenant’s inability to repair or maintain the business premises, constant delays in paying agreed monthly rent, or even the landlord’s genuine intention of rebuilding or demolishing the property.
In case the tenant does not take any step, the tenancy would be terminated automatically on the specified date on section 25 notice of the landlord. In case the tenant appeals to the court with an application for a new tenure, the landlord has to oppose this application in court. The landlord also, has the option to apply for termination of the lease, in court. This could be an attractive proposition if the landlord requires certainty.
Seek professional legal assistance to end your business lease using appropriate grounds.