Informal Letting of a Commercial Property


Today we are going to take a look at informal tenancy agreements on commercial property. 


You own a commercial property that has been empty for a while. You have decided that you want to sell the property next year.  You think it’s a good idea to get in a short term tenant and you find someone who says they want a one off six-month contract. You don’t bother with a written contract. A gentleman’s agreement will do. 


Everything is looking rosy. Then you put the property on the market and inform the short term tenant.  


‘Hang on a minute,’ says the tenant. ‘I have a legal right to extend my tenancy. I’m not going anywhere.’


You point out that they are only there on an agreed temporary contract. 


After contacting your solicitor you may find out that:


Because there was no written contract you cannot prove the tenancy was for a limited period of 6 months and you did not opt out of section 24 to 28 of the Landlord and Tenant Act 1954 excluding security of tenure. 


This means that the tenant would be protected by Part II of the Landlord and Tenant Act 1954. 


This is one of the many scenarios that can play out in commercial leasing if landlords do not consult a solicitor. It is very important that a contract is drawn up even for short term agreements.


An experienced firm of solicitors will be able to draw up a contract tailored to your specific needs and requirements.