Guide

Business leases: renewing and ending

Business tenant's rights to end a tenancy

Tenants may sometimes be able to end their tenancy before the termination date set out in the lease. If they can, this will be because the landlord, or the lease, permits them to do so, as legislation itself does not give rights to early termination.

Ending a business tenancy early

A tenant may be able to end their business tenancy early if:

  • The landlord agrees to accept a surrender of the lease.
  • The lease includes a 'break clause' which allows the tenant to end it early.
  • The tenant is able to assign the lease to someone else. The landlord is entitled to ask for a guarantee from the tenant, in which case there will be a potential continuing liability to the landlord.
  • The tenant is able to sublet. Subletting involves remaining as a tenant but granting a sublease to another tenant. The original tenant remains liable for the rent even if they don't trade from the premises.

Otherwise, the tenant must continue paying rent for the whole period of the tenancy.

Tenants wanting to end a tenancy early are advised to consult a solicitor with specialised knowledge of commercial property matters. Choose and work with a solicitor.

Ending a fixed-term tenancy

A fixed-term tenancy is one which is due to end on a specific date set out in the lease. If neither party has taken action to end a fixed-term tenancy, then the tenant may choose to stay or leave at the end of the fixed term. Tenants wishing to avoid paying rent continually must move out of the premises by the end of the fixed term. If they decide to stay, they will have to continue paying rent. They can only then end this continuing obligation to pay rent by giving three months' notice, at the expiry of which the tenancy will end, and vacate the premises.