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Commercial Property: What Landlords and Tenants Need to Know

30 April 2025

Whether you're a commercial landlord or a business tenant, navigating property law can be a complex process.

From lease enforcement to property repairs and tenancy renewals, understanding your legal rights and obligations is crucial to avoid costly disputes and protect your long-term interests.

We break down four key areas of commercial property law that every landlord and tenant should understand.

1. Claims for Possession: What Landlords Need to Know

When a tenant breaches the terms of their lease, such as failing to pay rent or misusing the premises, a landlord may need to take legal action to regain possession of the property.

• The process: This typically involves serving notice on the tenant, such as a Section 25 (for opposed lease renewal under the Landlord and Tenant Act 1954) or other notice under lease terms, followed by court proceedings if necessary.
• Considerations: Possession claims must follow strict legal procedures. Errors in notice or process can result in delays or dismissal.
• Tip for landlords: Always document breaches and seek legal advice early to ensure compliance with statutory requirements.

2. Enforcement of Rights: Landlords vs Tenants

Commercial leases are legally binding agreements, and both parties have enforceable rights.

 Landlords can:

• Enforce payment of rent and service charges
• Require compliance with repair covenants
• Take legal action for unauthorised alterations or subletting

Tenants are entitled to:

• Quiet enjoyment of the property
• Protection from unlawful eviction
• Remedies for landlord breaches, such as failure to repair

Balancing these rights requires careful lease drafting, regular communication, and if necessary, mediation or litigation to resolve disputes.

3. Dilapidations: Understanding Repair Obligations

“Dilapidations” refer to breaches of lease covenants relating to the condition of the property, usually assessed at the end of a lease.

• For landlords: You may have the right to claim compensation if the tenant leaves the premises in disrepair.
• For tenants: You’re not automatically liable for all repair costs. Liability depends on lease terms and the property’s condition at lease start.
• Best practice: Both parties should agree to a Schedule of Condition at the outset and consider a professional dilapidations assessment near lease end.

4. Lease Renewal: The Landlord and Tenant Act 1954

Offers tenants of commercial premises the right to renew their lease when it ends, unless the landlord can prove one of the statutory grounds for refusal (e.g., redevelopment or own occupation).

• Statutory protection: Tenants must occupy the premises for business use to qualify.
• Opposing renewal: Landlords must serve notice under strict timeframes and be prepared to justify opposition with evidence.
• Negotiating terms: Renewals provide an opportunity to renegotiate rent and other lease terms. Make sure you understand your negotiating position.

Protecting Your Position

Commercial property law is filled with nuance. Whether you're a landlord protecting your investment or a tenant securing business continuity, early legal advice is the key to avoiding pitfalls.

Top Tips:

• Keep lease documentation up to date and legally reviewed.
• Maintain clear communication and a paper trail for all lease-related issues.
• Understand your obligations from day one, ignorance is not a defence.

Need Advice on a Commercial Property Matter?

Our specialist team advises both landlords and tenants on all aspects of commercial leases, property disputes, and lease renewals. If you're facing an issue or simply want to future-proof your property arrangements, we’re here to help.

Contact us today to speak to one of our commercial property solicitors. Call 01202 294411 or via online: Contact Us AB Solicitors For Your Legal Needs

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