Commercial Lease Advisory
Resolution advise upon rent reviews, lease renewals and lease restructuring on behalf of investors and occupiers across all property sectors. We use our technical knowledge and market awareness to help clients on all aspects of tenant and landlord work.
Our services include:
- General rental valuation advice;
- Lease Due Diligence;
- Rent review negotation;
- Lease Restructuring – Renewals, re-gears, and surrenders;
- Dilapidation settlement negotiation.
Rent reviews unsurprisingly often lead to dispute. Most are settled through negotiation between the respective surveyors. If an amicable agreement is not possible, the dispute will usually be referred to a third party independent surveyor, who will act either as an arbitrator or as an independent expert.
The Landlord and Tenant Act 1954 is the primary legislation governing lease renewals. The purpose of this Act is to provide businesses with security of tenure. The Act details how a landlord can terminate a lease with a Section 25 notice (under the correct grounds for opposition), and how a tenant can request a new tenancy with a Section 26 notice. All occupiers of commercial property have the right to renew leases under the Act, unless they have specifically “contracted out”, with the Act’s protection expressly excluded.
Commonly, either party will serve notice on the other bringing the existing lease to an end either on or after the contractual end date. If the landlord serves a hostile Section 25 notice, this formalises their opposition to granting a new tenancy and will state the grounds on which that position is taken. Conversely, the termination notice of the existing lease by the landlord will set out the prospective terms of a new lease. The tenant can also request a new tenancy in serving a Section 26 notice. If both landlord and tenant are amenable to agreeing a new lease or if the landlord cannot resist granting a new lease under the grounds for opposition under the Landlord & Tenant Act 1954, the new tenancy application will then proceed and negotiation will ensue. If the terms of the new lease cannot be agreed between the parties, the courts will determine them at a hearing, although there are strict time limits for formal notices which should be served by solicitors.
With any lease event on the horizon, it is important to seek professional representation and consider strategy. The area of rent reviews and lease renewals are complex, as leasehold occupation is governed by a combination of contractual lease terms and legislative framework which require adherence to protocols. Resolution act on behalf of both landlords and tenants in London and the South East as well as nationally. As seasoned valuers, Resolution fully understand the legislation, interpretation of comparable evidence, factors affecting value relating to the physical property and impact of lease terms.
We have a wealth of experience in preparing third party submissions.