Possession of Commercial Property
Former tenants remaining in occupation of your commercial property
A former tenant that remains in occupation after the expiry of a commercial lease excluded from the provisions of the Landlord and Tenant Act 1954 (LTA 1954) can be difficult particularly if the tenant has paid, and you, the landlord accepted rent. The former tenant’s that remains in occupation in your property is likely to be as one of the following:
- A tenant on sufferance
- A trespasser;
- A tenancy at will; or
- An implied periodic tenancy.
Tenant on sufferance
A tenancy on sufferance arises when the tenant wrongfully remains in occupation of the property after the lease expires and you fail to confirm willingness for the tenant to remain. A tenancy on sufferance can only be created by operation of law and not by express agreement. You may commence possession proceedings without any previous demand for possession. If you agree to the tenant staying then the tenant will at the very least have status of a tenancy at will. However, the longer the situation continues, the stronger the tenant’s argument will be that there a periodic tenancy status exists, especially if the landlord or its agents have been accepting rent.
If you have communicated that you do not want the tenant to remain in occupation of the property then the tenant would be a trespasser.
Tenancy at Will
A tenancy at Will can be created expressly or by inference and exists where there is a tenancy on terms that either party may determine at any time. It is a tenancy which is not a periodic tenancy nor for a fixed term, but one which lasts for so long as both parties desire. It is not generally regarded as constituting an estate in land. A tenancy at will does not give the tenant a right to a lease renewal under the LTA 1954.
A periodic tenancy can be created by express agreement or by implication, where there is a landlord and tenant relationship and rent is demanded and paid by reference to a particular time period: weekly, monthly, quarterly or yearly. A periodic tenancy can potentially give the tenant a right to a lease renewal under the LTA 1954. If a periodic tenancy with statutory protection has been created, entering into a new lease will act as a surrender of this protected tenancy.
Steps that can be taken
You need to regularise the position as soon as possible to avoid leaving yourself open to a claim by a former tenant that an implied periodic tenancy exists. If you wish to grant a new lease to the former tenant, it is still prudent to send the former tenant that has remained in occupation:
- A letter demanding possession
- A separate without prejudice letter indicating that you do not intend to issue proceedings for possession at court for a short period until after a stipulated date to allow negotiations for a new lease to take place and which should require the completion of a tenancy at will in the interim
- A rent stop should be put in place so that the rent is not inadvertently demanded or collected. The rent stop can be lifted if the tenant enters into the tenancy at will.
- If negotiations for the new lease subsequently fail, the tenancy at will can be terminated immediately.
If you wish to recover possession of your property, then you should write to the former tenant stating that it is occupying your property as a trespasser and that you require vacant possession immediately. If the former tenant does not give vacant possession, you can then issue court proceedings for possession. How to avoid tenants overstaying When a lease completes, you must ensure that your Solicitor or Managing Agent contacts the tenant providing notification six to eight months before the lease expires. This not only provides you to establish the tenant’s plans but sets out the intentions of both parties.
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