Relief from Forfeiture: To effectively exercise a renewal, a commercial tenant must give the written notice required by the renewal provision in the lease to its landlord. The ADLS deed of lease (for example) requires the commercial tenant to give a minimum of 3 months notice to its landlord if the tenant wishes to exercise its right of renewal. If a commercial tenant fails to give notice on time, a commercial landlord can refuse to grant the renewal.
Advice for tenants from our commercial leasing law experts: Relief from forfeiture when your commercial landlord refuses to grant a right of renewal
If you are commercial tenant who has failed to give timely notice and your landlord is refusing to grant the renewal for this reason, you can apply to court for relief under the Property Law Act 2007. The court has a wide discretion to grant relief in such circumstances and will consider:
- Why the tenant did not give timely notice;
- Whether that default was due to a landlord action;
- The tenant’s conduct;
- The prejudice to the tenant and the landlord if the relief is or is not granted;
- The landlord’s motivation for refusing to renew; and
- The interest of third parties.
If you find yourself in this situation, get in touch as soon as possible and we can help by first negotiating with the commercial landlord on your behalf. If your landlord continues to refuse to grant the renewal, then we can assess your chances to get relief from the court and act for you in those proceedings.
If a renewal is not formally exercised (or there is no renewal) but the commercial tenant continues to occupy the premises after the expiry of the lease term, the commercial tenant is “holding over” and the lease becomes a periodic tenancy. A periodic tenancy can be terminated by either the commercial landlord or the commercial tenant by giving the other party the minimum notice required under the lease (typically 1 calendar month or 20 working days).
