The main rules for extending an office lease are that you must serve formal notice between 6 and 12 months before your lease ends, negotiate new terms with your landlord including rent and lease length, and either reach agreement or apply to court if you cannot agree.
Most business tenants have an automatic right to renew under the Landlord and Tenant Act 1954, unless their lease was “contracted out” at the start. Landlords use a Section 25 notice to begin the process, whilst tenants use a Section 26 notice.
Do I Have the Right to Extend My Office Lease?
Yes, you have the right to extend your office lease if it falls under the Landlord and Tenant Act 1954 and wasn’t contracted out at the start of your tenancy. Most business tenants enjoy this statutory protection, which means your landlord must follow a formal process rather than simply asking you to leave when the lease ends.
Check your original lease agreement for a “contracted out” clause. If your lease was contracted out, you don’t have automatic renewal rights. If there’s no contracted out clause, you’re “contracted in” and benefit from security of tenure.
Landlords can oppose renewal on specific grounds, such as wanting to occupy the property themselves, planning to demolish or reconstruct the building, or if you’ve failed to meet your lease obligations. These grounds are limited and must be proven.
How Do I Start the Lease Extension Process?
You start the lease extension process by serving a Section 26 notice on your landlord between 6 and 12 months before your current lease expires. This formal notice requests a new tenancy and should include your proposed terms for the new lease, including rent and lease length.
The notice must be served correctly using the proper legal form and delivering it to the right person or address. Most businesses use a commercial property solicitor to handle this step to avoid invalid notices.
Alternatively, your landlord may serve you with a Section 25 notice instead, stating whether they’re willing to grant a new tenancy or opposing renewal. Once either party has served notice, the other cannot serve their own. Whoever moves first controls the process.
After notice is served, you have a specific deadline to either agree new lease terms or apply to court for a new tenancy. Miss this deadline and you could lose your right to stay in the property.
What Terms Can I Negotiate in My New Lease?
You can negotiate rent, lease length, break clauses, rent review terms, service charges, and repair obligations in your new lease. The starting point is usually your current lease terms, but everything is up for discussion depending on market conditions.
The key terms you can negotiate include:
- Lease length – Shorter terms with break clauses if you’re uncertain about future needs, or longer terms if you want stability
- Break clauses – Options to end the lease early on specific dates, which are valuable for growing businesses with changing space requirements
- Rent review clauses – How and when rent can increase during the term, including frequency and whether reviews can go down as well as up
- Service charges – Caps on annual increases or requirements for landlord approval before major works
- Repair obligations – Clarifying what you’re responsible for versus what the landlord must maintain
- Insurance costs – Whether these are reasonable and properly evidenced
Your negotiating position depends on market strength, whether your landlord has other interested tenants, your track record as a tenant, and how much your landlord wants to keep you versus finding someone new.
Can My Landlord Refuse to Extend My Lease?
Your landlord can refuse to extend your lease only on specific grounds set out in Section 30 of the Landlord and Tenant Act 1954. These include persistent rent arrears, substantial breach of lease obligations, failure to repair, where they want to demolish or reconstruct, or where they intend to occupy it themselves.
The landlord must prove these grounds and include them in their Section 25 notice. They can’t simply refuse because they want a different tenant paying more rent. There must be a valid statutory reason.
If your landlord opposes on grounds relating to your conduct, like rent arrears or disrepair, you may be able to remedy the breach and still obtain a new lease. Courts are generally reluctant to throw out businesses for breaches that can be fixed.
Where opposition is based on redevelopment or the landlord’s own occupation needs, you’ll likely need to relocate but should receive compensation calculated based on rateable value.
How Long Does the Lease Extension Process Take?
The lease extension process typically takes 4 to 8 weeks if both parties cooperate and agree terms quickly. However, if negotiations are difficult or court proceedings become necessary, the process can extend to 6 to 12 months or longer.
Simple renewals where both parties want to continue on similar terms move fastest. If you’ve been a good tenant and market conditions haven’t changed dramatically, your landlord will likely want to keep you with minimal fuss.
Complex negotiations over rent reductions, break clauses, or repair obligations take longer. Each party may need to instruct surveyors and solicitors, all of which adds time.
If you end up in court, expect significant delays. Court dates may not be available for several months, and costs mount quickly, which is why most parties settle before reaching this stage.
Start the process early. Ideally 12 months before your lease ends. This gives you maximum negotiating time and avoids the pressure of an imminent deadline.
Contact us for expert guidance on extending your office lease and negotiating the best terms for your business.