Keeping Tenants in Place Legal and Practical Tools in Todays Market
By Emma Bucknall
This article looks at the ways in which a landlord can keep a solvent tenant in its premises for the maximum term of its lease, while being mindful of the market and its future recovery.
In 2008, average prime office rents across London fell from £65 to around £50 per square foot and vacancy rates rose to 11% by year-end. Many tenants are downsizing, and are keen to extricate themselves from their leases and the financial liabilities thereunder. Meanwhile, landlords want to keep buildings fully occupied, not just to collect rent and insurance premiums, but also to avoid empty rates liability and irrecoverable service charge in respect of the vacant space.
In this article we consider four main ways in which a lease can end: by the exercise of a tenants break right, by forfeiture, by surrender and at the expiry of the contractual lease term.