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The landlord could be subconsciously granting the tenants a right to security of tenure where the landlord has agreed to grant a lease which:
So what do the 3 phrases above mean? The simple answer is that they all mean the same thing.
If a lease has been excluded from sections 24-28 of the Landlord and Tenant Act 1954, the tenant does not have an automatic right under statute to request a renewal lease based on the same or similar terms at the end of the term of the current lease.
Where a tenant has a lease of a commercial property which:
...then the tenant will have an automatic right under sections 24-28 of the Landlord and Tenant Act 1954 to make a formal request for a renewal lease based on the same or similar terms, save for duration and term.
It becomes important if the landlord is considering developing the property or occupying the property for their own purposes at any point in the future. If a tenant has security of tenure, thereby giving the tenant an automatic right under statute to formally request a renewal lease based on the same or similar terms, the landlord would be liable to pay the tenant compensation in the event the landlord refuses a tenant’s formal request for a renewal lease based on the same or similar terms.
The level of compensation owed to a tenant in such instances also increases the longer the tenant remains in occupation.
Whilst the tenant may think the landlord is being deliberately unhelpful in not letting them in earlier, by the landlord refusing the tenant’s requests to occupy the property before the lease has completed, it can save issues later down the line, particularly where the lease negotiations take longer than expected or there is a breakdown in the negotiations for any reason.
Allowing a tenant into the property early can also mean that the transaction becomes protracted as there is no incentive for the tenant to finalise the lease as soon as possible if they are already occupying the property.
If you are thinking of letting a commercial property, or have recently agreed terms for a commercial letting and want to ensure a tenant does not gain any security of tenure rights, please contact our Commercial Real Estate Team – click here.
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