ending a commercial lease
Tenants wanting to avoid prolonged and costly disputes at the end of their leases should deal with any issues well in advance. A good rule of thumb is to start thinking about potential issues at least 6 months before the date of expiry.
The first issue is to ensure that the lease will definitely end on an agreed date. No matter what your lease says about when it ends you will in addition require to serve written notice on the landlord to end the lease well before the actual expiry date. This is a complex area of law, with specific rules and time limits. If you get the notice wrong the lease could automatically continue for an extra year, with rent continuing to be payable.
Once you are sure of the expiry date you should have a look at a copy of your lease to see what obligations you owe the landlord. If your lease is long or complex you may wish to ask your solicitor to do this on your behalf. Once you have established what you are legally required to do it is worth discussing with your landlord what he expects in practice. Taking the time to talk to your landlord at an early stage is likely to reduce the scope for dispute at a later date.
The lease is likely to require you to return the property to the landlord in a specific condition. There may be photos available which show what this condition is. Your lease may allow the landlord to serve a schedule of dilapidations specifying what repairs are required. If you know your landlord is likely to serve such a schedule it is a good idea to ask your landlord to prepare this as early as possible so that you have sufficient opportunity to get these organised.
It is usually in your interests to carry out any repair and maintenance to the property in the months leading up to the date of expiry as this leaves you in control of costs. Remember if you don’t do what is required under the lease the landlords can carry out any works themselves and recover this cost from you, employing third parties if they so wish.
A loss of control of the extent of works, when works are carried out and by whom is likely to lead you to incur much greater costs. Replacing light bulbs yourself may only cost 30p per bulb but landlords, safe in the knowledge that their costs will be met by you, may quite happily instruct an electrician to carry out the same replacements at £30 per bulb!