Lease renewal is where tenants hold less leverage than at new lettings — but understanding the 1954 Act rights and market context turns renewal into a genuine negotiation.
The Landlord and Tenant Act 1954 (Part II) gives commercial tenants automatic right to renew — unless the lease is contracted out of the Act. Around 60% of London commercial leases are contracted-out. Check your lease.
Renewal process:
Between 6–12 months before lease end. Either 'hostile' (landlord opposes renewal) or 'friendly' (proposes new terms).
Tenant must respond within timelines.
Terms of renewal lease negotiated — rent, term, break rights.
If no agreement, tenant can issue at County Court. Judge sets terms.
No automatic renewal right. Tenant negotiates from standing-start commercial position. Landlord can let space elsewhere.
Rent on renewal is typically set at 'open market rent' as at the renewal date. Valuers reference:
Renewal often coincides with fit-out refresh. See Office Renovation and Office Refurbishment — phased delivery keeps teams in place during renewal-driven renovation.
Under the 1954 Act, only on specific grounds (occupation for own use, redevelopment, persistent breach etc). Contracted-out leases give no right to renewal.
Measured survey and fixed-price quote within 10 working days.