Commercial tenants often assume they have fewer rights than residential tenants. While commercial leases do offer landlords greater flexibility, tenants are still protected by important legal rights that can affect rent, repairs, lease renewal and eviction.
Many disputes arise simply because tenants are unaware of what they’re entitled to under their lease or under commercial property law. Understanding your rights early can help you avoid costly mistakes and strengthen your position if a dispute arises.
In this article, we explain the key rights commercial tenants should be aware of and where disputes commonly occur. We also explain how to arrange a free 30-minute consultation with a commercial property dispute solicitor to discuss your situation.
What is a commercial tenancy?
A commercial tenancy is a lease of property used for business purposes rather than residential living. This can include offices, shops, warehouses, industrial units and hospitality premises.
Commercial leases are largely governed by contract law, meaning the terms of the lease play a central role in defining the rights and obligations of both landlord and tenant. However, statutory protections may also apply in certain situations.
Because commercial leases can vary significantly, tenants should never assume that standard rules apply without checking the lease terms carefully.
Security of tenure under the Landlord and Tenant Act 1954
One of the most important rights for commercial tenants is security of tenure under the Landlord and Tenant Act 1954. Where this protection applies, tenants may have the right to renew their lease at the end of the term.
Security of tenure means that, in most cases, a landlord can’t simply require a tenant to leave when the lease expires. Instead, the lease can continue on similar terms unless the landlord can rely on specific statutory grounds to oppose renewal.
Not all commercial leases benefit from this protection. Some leases are contracted out of the 1954 Act, meaning the tenant has no automatic right to renew. Understanding whether your lease is protected is crucial.
Rent and rent review rights
Commercial tenants are bound by the rent provisions set out in their lease, but this doesn’t mean landlords have unlimited freedom to increase rent.
Rent reviews must be carried out in accordance with the lease terms. Disputes often arise where tenants believe rent increases are unreasonable or haven’t been calculated correctly.
Tenants may have the right to challenge rent reviews, particularly where the lease provides for market rent assessments or dispute resolution mechanisms.
Repair and maintenance obligations
Repair obligations are another common source of dispute. Many commercial leases place extensive repairing responsibilities on tenants, sometimes requiring them to return the property in good condition at the end of the lease.
Tenants should be aware of what they’re responsible for and whether any limitations apply. Repair disputes frequently arise at lease end, where landlords seek to recover the cost of alleged disrepair.
Understanding repair clauses and schedules of condition can significantly affect a tenant’s financial exposure.
Ending a commercial lease and eviction rights
Commercial tenants don’t have the same protection from eviction as residential tenants, but landlords must still follow the law and the terms of the lease.
A landlord may be entitled to end a lease early if the tenant breaches their obligations, such as failing to pay rent or breaching repair clauses. However, the correct legal process must be followed and tenants may have the right to remedy certain breaches.
Where a lease is protected by the Landlord and Tenant Act 1954, tenants may also have rights when a landlord seeks possession at the end of the lease term. Landlords can only oppose renewal on specific statutory grounds.
Understanding your rights in these situations can help you respond effectively and avoid unlawful eviction.
Alterations and use of the property
Commercial leases often restrict how tenants can use the property and what alterations they can make. Tenants may need landlord consent before carrying out works, even if those works are necessary for the business.
Disputes can arise where consent is unreasonably withheld or where tenants carry out alterations without approval. These issues can lead to claims for reinstatement or damages at the end of the lease.
Knowing what permissions are required and how consent should be handled can help prevent disputes later on.
Resolving disputes with landlords
Commercial tenancy disputes can have serious financial and operational consequences for businesses. Misunderstanding your rights or failing to act in time can weaken your position.
Disputes between commercial landlords and tenants can arise at any stage of a lease, from rent and repairs to renewal and termination.
In many cases, disputes can be resolved through negotiation or alternative dispute resolution, such as mediation. This can save time and reduce costs while preserving commercial relationships.
Where disputes can’t be resolved informally, legal action may be necessary to protect your position and enforce your rights.
Speak to a commercial property dispute solicitor about tenant rights
If you’re a commercial tenant facing a dispute with your landlord or are unsure about your rights under a lease, professional advice can help you understand your options and protect your business.
A commercial property dispute solicitor can review your lease, explain your rights and obligations and help you resolve disputes effectively, whether through negotiation or formal proceedings.
Please note that this article is solely for informational purposes. It’s not a substitute for legal advice. We encourage readers to contact Osbourne Pinner for case specific guidance.
We offer a free 30-minute consultation to discuss your situation. You can speak with us via video call or visit our offices in Harrow, Canary Wharf, Piccadilly Circus or Manchester. To arrange your consultation, call 0203 983 5080, email [email protected] or complete the form below.
