Make an enquiry

    Enquiry Form









    Contact

      Enquiry Form






      Supporting Document


      We are open for business and working remotely Find Out More
      FJG Solicitors in Essex, Colchester, Chelmsford, London – Fisher Jones Greenwood
      • 0845 543 5700
      • [email protected]
      • Make an enquiry
      • Online Payment
      • Home
      • Services
        • Services for you
          • Advocacy
          • Civil & Commercial Disputes
          • Clinical and Medical Negligence
          • Conveyancing
          • Employment Law
          • Family Law
          • Children Law
          • Immigration & Visas
          • Personal Injury
          • Public Law & Human Rights
          • Wills, Life Planning & Probate
        • Services for business
          • Academies Portal
          • Agricultural and Rural
          • Business Immigration
          • Commercial Dispute Resolution
          • Commercial Litigation
          • Professional Negligence
          • Commercial Real Estate
          • Construction Law
          • Planning Consultancy
          • Corporate and Commercial
          • Education Services
          • Employment Law
          • Healthcare Services
          • International Services
          • Landlord & Tenant Services
        • Services by sector
          • Agriculture & Estates
          • Care Homes
          • Charities & Social Enterprise
          • Construction
          • Education Law
          • Energy
          • Family Owned Business
          • Healthcare & Dentistry
      • Our people
      • About us
        • CSR
        • Awards
        • Our Vision
        • Accessibility
        • Careers
        • Work Experience
        • Equality & Diversity
        • FLOCC
        • FJG Foundation
        • SAFE Forum
      • News, Events & Insights
      • Blog
      • Podcasts
      • Contact us
        • Colchester
        • Chelmsford
        • Billericay
        • Clacton-on-Sea
        • Holland-on-Sea
        • London

      What does opting out of Security of Tenure really mean?

      11 September 2019 by Charlotte Burmby

      Charlotte Burmby
      security of tenure

      When negotiating the terms of a commercial lease agreement, a landlord may propose ‘opting out’ of the security of tenure provisions set out under the Landlord and Tenant Act 1954 (the Act). It is important that tenants understand the consequences of contracting out of these security of tenure provisions.

      What is Security of Tenure?

      Security of Tenure provides a statutory protection for tenants of commercial premises who will have the right to request a new tenancy on the same or similar terms, on termination of the current tenancy, except where the Landlord relies on a statutory ground to oppose a new lease. There are seven statutory grounds of opposition that the Landlord can rely on. The most common would be if the tenant has failed to pay rent, or the tenant has failed to repair and maintain the premises, for example. A landlord may want a commercial lease to be contracted out of the security of tenure provisions to retain control and flexibility over the terms of the lease.

      Consequences of contracting out

      • The lease will come to an end on the contractual end date unless the tenant requests a renewal of the lease. This request will be granted at the landlord’s discretion and there is no requirement to reject the request on the basis of a statutory ground of opposition. I.e. the parties negotiate new terms to suit.
      • If the tenant applies for a renewal lease and the landlord accepts, the tenant cannot apply to court to have similar terms of the old lease to be the terms on the new lease, because these are new negotiations, albeit that they relate to the same premises.
      • On the contractual end date, the tenant does not have a right to compensation on leaving the premises. This is in contrast to the rights granted under Security of Tenure where the tenant may be awarded compensation (depending on how long the tenant has already been in occupation) if the Landlord relies on certain statutory oppositions in rejecting the request for a renewal of the term of lease.

      An alternative – ’Option to Renew’ clause

      If the parties to the lease have agreed the decision to opt out of the security of tenure provisions under the Act, they could in the alternative, agree to include a contractual right in the lease providing the tenant with the option to renew after the contractual end date. In contrast to the statutory protection under the Act, this contractual protection can only be used once.

      If the parties can agree an ‘option to renew’ clause in the lease, the tenant can call upon the Landlord to grant a new lease at the end of the contractual term of the present lease on terms to be either set out in the present lease, or on terms to be agreed at the relevant time. Conversely, if there is no option to renew, there is no obligation for either party to renew the lease.

      For example, Jack (the tenant) and Jill (the landlord) are proposing to enter into a new lease and have agreed to contract out of the Act, therefore not benefiting from the statutory protection mentioned above. Jack wants the ability to extend the lease after the contractual end date. Jack and Jill can negotiate the terms of the lease to include the ‘Option to Renew’ clause. This clause will allow Jack will be able to extend the lease after the contractual end date (this can only be extended once), by serving notice on the Jill that he wishes to do so.

      If you are proposing to enter into a commercial lease, Fisher Jones Greenwood’s have an experienced Commercial Property team, if you need their help, please call 01206 700113 or email [email protected]

      Authors
      Archives
      Subscribe to RSS feed

      Recent Posts

      • What happens when parents disagree on vaccinations?
      • Why is the New Year a good time to make or update your Will?
      • Government reforms make it easier and cheaper for leaseholders to buy  their homes
      @FJGSolicitors

      What happens when parents disagree on vaccinations? In our latest blog, Family Law Partner & Solicitor, Charlotte K… https://t.co/lopnSAsEnq

      12 hours

      FJG would like to say a massive #thankyou to all our wonderful clients who participated in our Charitable Will Camp… https://t.co/hEgB0k8e9S

      3 days

      RT @APIL: “I just felt lost. How can I put it… your life is living in that bed, and if that person doesn’t recover, we’re gone. We cannot f…

      3 days
      Billericay 01277 623132
      Chelmsford 01245 890110
      Colchester 01206 835300
      Clacton 01255 323103
      Holland-on-Sea 01255 818900
      London 08455 435700
      • Disclaimer
      • Accessibility
      • Terms & Conditions
      • Privacy Policy
      • Cookies
      • Price & Service
      • Signup to our Newsletter
      • COVID-19 Risk Assessment
      Website designed and built by Green Square

      Fisher Jones Greenwood is the trading name of Fisher Jones Greenwood LLP, a Limited Liability Partnership authorised and regulated by the Solicitors Regulation Authority and registered in England ( Number: OC305854 ). A list of members is available for inspection at the registered office at Charter Court, Newcomen Way, Colchester Business Park, Colchester, Essex CO4 9YA

      We are open for business and working remotely

      Here at Fisher Jones Greenwood Solicitors we would like to reassure all our existing and future clients that even in these uncertain and difficult times we are able to assist you with your current and future legal requirements.

      Like so many others, we are constantly monitoring and acting on Government advice and guidelines and as such our offices are temporarily closed to the public. You may, if you wish, visit our offices to post any correspondence and documents through letter boxes.

      As a result of our commitment to innovation and technology, we can and are maintaining a full service, albeit remotely, with all appointments being held digitally or via the telephone. Our case management system enables us to have full access to your electronic file from any location and we have a core team of staff processing all incoming post directly onto your file so that your legal adviser can continue to work with you. We are pleased to say that we do not currently anticipate any disruption to your matter.

      Please do not hesitate to contact your legal adviser by email or by telephone should you have any worries or concerns. Alternatively, please call our main switchboard number (01206 835300) and a message to return your call will be by relayed to the relevant person.

      Finally, everyone at FJG would like to wish you, your families and your colleagues well throughout this current crisis.

      Best wishes
      Paula Cameron
      Managing Partner