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How to Give Notice to a Commercial Tenant

How to Give Notice to a Commercial Tenant
How to Give Notice to a Commercial Tenant

Providing notice to a commercial tenant may seem simple – but it is essential landlords correctly give notice to ensure they end a lease legally and in accordance with the terms and clauses included within the rental agreement.

A commercial landlord may wish to remove a tenant for many reasons, from wanting to sell the property to trying to end a lease with a tenant that is commonly late with rental payments or has otherwise breached the lease terms, such as subletting without permission.

Following the appropriate steps to end a tenancy amicably or evict a business tenant for non-payment or non-compliance with lease clauses ensures you are protected from potential liability claims and can move forward without needing to invest unnecessary time or cost.

Disclaimer: The information provided on clearway.co.uk is intended for general informational purposes only and should not be construed as advice or relied upon as a substitute for professional legal counsel on the subject of debt, lease or eviction-related matters. Any reliance you place on the information provided on clearway.co.uk is strictly at your own risk. We shall not be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, arising from the use of, or reliance on, the information presented on this website.

How to Ensure Notice Presented to a Commercial Tenant is Valid

There are several types of notice a commercial landlord may need to serve, depending on the factors discussed below, including:

  • Whether the tenant is in agreement that the lease will come to an end or is being asked to vacate the premises at the end of a fixed-term lease agreement.
  • Whether the tenant is being evicted due to breaches of the lease contract, such as non-payment of rent.
  • The process the landlord chooses to affect the eviction or repossess the property.

Giving the appropriate notice is essential, stating the reasons, ensuring the notice to vacate the property is valid, and complying with the various laws and regulations around commercial property tenancies.

How to give notice after a fixed term lease ends

If a fixed-term lease has come to an end, and the tenant has agreed to vacate the property, a landlord will still normally need to provide formal notice to document the agreement and set out any conditions, such as bringing the property back into its original condition or removing fixtures or business signage.

The best practice is to produce written notice and deliver it via a recorded method. Some landlords might send a hard copy via registered mail and email a digital copy as a precaution.

Written notice should be given to the tenant three months before the lease term expires or before the landlord would like the tenant to vacate the property. It should state any final rental payments due and the conditions against which any deposit paid at the start of the tenancy will be returned.

Related reading: How much notice should a commercial tenant give?

Landlords and tenants then have several weeks to organise practicalities such as notifying utility providers of the change in billing details or informing the local council where business rates will be billed to a new tenant, for example.

However, submitting notice is not quite as straightforward if the tenant does not wish to leave or is being evicted due to late or non-payment of rent or any other breach of their lease terms.

Repossessing a Commercial Rental Property

Taking back possession of a rented business premise while a tenant remains in situ is called forfeiture. The first thing to do is verify whether your lease agreement contains the appropriate clauses that give you the right, as the landlord, to forfeit the lease legally.

Provided your lease includes clauses that permit forfeiture, there are then several approaches you may wish to take, all of which involve serving notice to the tenant in line with the legal requirements.

Repossessing a Commercial Premise Through Peaceable Re-Entry

In this process, the landlord re-enters the property – ensuring the tenant is not present. Most often, they will work with a certified enforcement agent to ensure the re-entry complies with tenant protections, changing the locks to prevent the tenant from returning without permission.

Related reading: What is forfeiture of lease by peaceable re-entry?

Peaceable re-entry requires the landlord to have served notice called a Section 146 to inform the tenant that they intend to forfeit the lease. They may not be able to do so, regardless of any covenants or clauses the tenant has breached, without giving appropriate notice or allowing the tenant the opportunity to make good, such as paying all rents owing or bringing the property back to a sufficient condition.

Notice may be served when rent is outstanding for a minimum period, normally either 14 or 21 days past due, depending on the clauses within the lease agreement.

Once peaceable re-entry has been completed, the landlord will need to attach a notice to a visible place, usually on the front door.

Following the Correct Peaceable Re-Entry Process

This option may be high-risk depending on the specific scenario and whether the tenant has since vacated the unit or property. Commercial tenants may have a case to apply to the courts for protection from forfeiture, and if successful, a landlord could be found liable for wrongful eviction.

If the tenant has been subject to forfeiture proceedings via a court order, they are automatically entitled to relief if they pay all arrears, interest charges and legal costs within five full days of the initial hearing.

Tenants can also apply to the court for forfeiture relief as much as six months past a peaceable re-entry, although this is unlikely to be granted if the landlord has since let the premise to a new tenant.

Therefore, we recommend any business landlord seek professional advice before taking further action.

Issuing a Possession Order Through the Courts

Another option is applying to the courts for a possession order, an alternative that carries minimal risk but can be more expensive and take longer to complete. Landlords can apply, detailing the information relevant to the submission and listing any damages they wish to claim.

The court will provide a hearing date, but this can take several weeks, depending on the region and the availability of new hearings. However, expedited options are available if a commercial property is being occupied by an unauthorised person, such as in instances of trespass or squatting.

In this circumstance, a court may grant an interim possession order instructing the occupant to leave the property within 24 hours, backed by the ability to enforce an eviction if they fail to comply with the court order.

For more details about any of the information included in this guide, please get in touch with the Clearway commercial property team at your convenience.

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