Legal Advice
Have you updated Can a periodic businessyour tenant commercial in occupation ofcontract premises obtain aterms lease from landlord? aftertheir Covid 19? You are a commercial tenant running a business from Why and theyousmall matters. now wantprint your landlord to grant you premises • Cancellation of the contract either your lease standard aReview written forcontracts a fixed term. automatically or at the request of one of
or T&Cs
In particular, whether:
businesses
must
consider
the parties. a new lease,have the tenant be lease, perhaps in order to grow You may have been paying rent resolve the dispute which could becontract • the terms been will effectively The wayor in quarterly which wefor dosome business has changed or sell your business, you will the not performing monthly unsatisfactory both parties and able to obtain a new lease on • Excusing partyto from incorporated into the contract, according as a result of the pandemic, be able to serve onfurther the landlord years, but your landlord has stilland businesses of aincourt case terms to be agreed or if not performancethe ofuncertaintly the contract need to ensure that term they lease. have adapted their under section lawas principles. Youbymust a notice 26or of in thepart. not given you a fixed could be avoided by agreeing to common agreed determined the show whole trading thethe ‘new normal’. It Act is requesting a new lease. 1954 What canterms you dototofit force upon lease terms. that thecourt. otherAccordingly party specifically agreed the landlord • thisSuspending of granting an The right to do only appliesperformance landlord’s hand? important to review your standard business cannot simply impose anyformation terms of, the terms before One wayperformance. in which the landlord to, or knew extension of time for future tenants whose tenancy was contracts or terms and conditions to(T&Cs) it wishes and and the court will look can regularise the position is to of the contract; Rights under a periodic granted fixed drafting term certain is important it will be under in order to minimise the future effects of afor a The at the implied terms of the periodic servesince a written notice tenancy exceeding onestrictly year or for any by the courts are when fair, considering as determined construed tenancy what in pandemic or events beyond your control. sectionwhen 25 of deciding the 1954 Act • the terms term and thereafter from yearand obligations It is likely that you are a periodic upon the rights of thethe parties. accordance with thebe Consumer Rights terminating tenancy and terms should inserted in the Most boilerplate to year. tenantbusinesses and if you will havehave beenstandard in Careful attention needs tostating be given to various whether or not the landlord new lease. Act 2015. T&Cs which may have been in place for years, occupation of business premises So what should the tenant do? definitions including ‘pandemic’ is willingor to ‘epidemic’ grant a new lease and The landlord is therefore likely to paying for more but it isrent advisable to than review these to take into Fairness test so on whataccepted terms including rent using a definition that isif generally Negotiate with your be agreeable to grant a lease to 12 months, youmajor will have become events could account how intervening and length of lease. Terms in B2Ca contracts and toespecially a lesser degree periodic tenant since landlord eg the definition adopted by the World Health a protected businessfor tenant with governmental frustrate contracts, example Organisation which would accepted in theingrant If thebelandlord opposes it cannot increase thetorent B2B contracts, are subject thewithout unfair the rights granted by the Landlord A periodic protected tenant should interference, pandemics, natural disasters, international contracts or where a party of a new lease, then it may only first terminating the2015. leaseAunder & Tenant Act 1954 Part 11. terms provisions set out in CRA term or be in a strongisposition to negotiate and other supervening events. reliant upon a supplyrefuse from on abroad. certainEven grounds set out As such the landlord cannot theif, Act, and thetoposition will a new lease with the landlordofwho notice is unfair contrary the requirement the definition ‘force majeure’ needs to be in the statute, most commonly simply terminate yourclauses lease by are would be keen to regularise the remain uncertain. Force majeure refusal on the grounds of of good faith, it causes a significant imbalance examined since the long established definition giving you one month’s notice. position. Without a lease, the important Taking legal advice under the persistent rent arrears, being able of an event that ‘could not have been in the parties’ rights and obligations landlord cannot unilaterally It would need to serve you with toavoided’ demonstrate annot intention to reasonably anticipated or would While there is a common law doctrine It is best to seek first contract to the detriment oflegal theadvice consumer. increase the rent, or regulate the a statutory notice under the 1954 own now cover a pandemic occupy which the waspremises alreadyfor itsTerms before finalising termsthe in principle of which may6 apply where use ofan the premises or prevent which do not satisfy fairness Act frustration giving you not less than nor orentered an intention known when the contractuse was into.to redevelop. with your landlord ensure that unforeseen the tenant from sharing more than 12 event months’has noticemade and a contract test are unenforceable againsttoconsumers. the terms of the new lease are not landlord must demonstrate its majeure The occupation assigning impossible ofhave performance, the doctrine is very orIs you will then the right to a force clause The Markets Authority the ability to do these things if Competition onerous and reflect the terms of tenancy. It is unlikely that the apply to to theestablish court for and a new lease difficult has been construed enforceable in a BtoC contract necessary by producing plans and published your existing oral Where landlord could easily sell its (CMA) guidance ontenancy. unfair contract on terms to be agreed decidedSo businesses very narrowly by theorCourts. because of Covid 19? specifications and the necessary interest there is a dispute the landlord upon by terms entitled ‘Unfair contractwith terms: CMA37’ need to the relycourt. upon specially designed forcein the property while planning permissions. can a protected periodic tenant There are statutory provisions imposed upon This (CMA and theThis landlord is taking steps to Guidance). includes guidance on majeure in their Can youclauses require the contract terms. make it difficult for a landlord to contiuues in occupation an businessesfor seeking to rely on force majeure terminate the tenancy without the grey list and other potentially unfair terms landlord to grant a new They are important because theyindefinite make period. offering acceptable new lease provisions in contractsregain withpossession. consumers Annexit will A ofbethe CMA Guidance lease? on the happening of a specified provision important to seek relating to delays If the tenant iscaused a protectedand notices.terms, With oral tenancy agreements if in performance provides illustrative wording event or event beyond the controla of the arises legal adviceexamples as to your of rights and by the Covid or to relieve them of and theirthe landlord business tenant If the time has come that you dispute court19, would how to protect yourby position. does not have grounds to oppose need theincluding:certainty of a fixed term need to hear contractual evidence andobligations. try to parties which may regarded as unfair the CMA.
If expert you need expert legal advice, please contact Alan Zeffertt by email on If you need legal advice, please contact Alan Zeffertt by email on aze@anthonygold.co.uk or ask for him or a memberorofaour Commercial Team,Team telephone 020 7940 aze@anthonygold.co.uk member of our Property Commercial on 020 79404000. 4060.
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