Q. What is the difference between a commercial lease and a licence?

A. The distinction between a lease and a licence is of considerable importance nowadays as the Landlord and Tenant Act 1954, Part II (as amended) protects business tenancies. This Act only applies to tenancies and does not apply to licences and therefore you may not have the right to renew your tenancy or be due compensation should the Landlord require your property for their own services or redevelopment.

Q. What is a rent review clause?

A. It has become common to include particulars of the rent review procedure in leases. The clause usually provides for the rent to be reviewed at fixed intervals, but the form of these clauses varies from lease to lease. Normally the clause will specify a procedure for determining the reviewed rent and there may be a time limit in which Notices must be served to the tenants and Counter Notices served on the Landlord. Non- adherence to these may result in the Landlord not being permitted to increase the rent or the tenants having to accept whatever rent the Landlord suggests on review.

Q. Can a Landlord withold their consent to an assignment of a Lease?

A. There are examples where a Landlord can reasonably withhold consents to an assignment; if for example other property owned by him would be injured by the use for which the proposed assignee requires the premises, or if the assignee wished to profit from redevelopment plans by means of a nuisance value. The Landlord however cannot refuse assignment on the basis that he wishes to gain possession of the property himself, but there are circumstances when this is the case especially on the termination of a Lease. Careful handling is required if you are a landlord or tenant.

Q. How does a Lease come to an end?

A. The main ways in which a tenancy can be ended is by effluxion of time. There may also be a break option and operation of a condition subsequent, a merger or surrender; certain Notices to Quit, disclaimer, forfeiture or frustration. These are very complex matters and need to be analysed with expert advice.

Q. How does a landlord or tenant protect themselves should they wish to renew their Lease at the expiry date?

A. This can apply to the Landlord and the Tenant who requires the Lease to be extended or renewed in the future. Section 25 of the Landlord and Tenant Act (Part II) sets out the Notice procedures that the Landlord and Tenant must adhere to, in order to be fully protected should a new lease be required. The Landlord’s Notice must be in a prescribed form and served not more than twelve months nor less than six months before the termination date specified in the Notice. It must specify the date at which the tenancy is to come to an end and it must require the Tenants within two months after the date of the Notice to notify them in writing that he will be willing to give up possession or requires a renewal of the Lease at the date of termination.

The Landlord can oppose an application for a new Lease on statutory grounds as set out in Section 30 of the Landlord and Tenant Act which may include that they require the property for their own purposes, for redevelopment purposes, that the Tenant is in breach of covenants and a number of other matters.

It is paramount that the terms and conditions of the 1954 Act are adhered to, as time is of the essence.

Q. Do you have a Complaints Procedure should I be dissatisfied?

A. Castles Surveyors has a complaints procedure which is compliant with the RICS Standard. Should you have reason to complain you would need to bring the matter to our attention so that we can discuss it with you.