Search

How can we help?

Icon

What happens when a business tenant remains in occupation after the expiry of its lease?

Difficulties can arise when a business tenant remains in occupation of a property when its right to do so has come to an end. This may be because the tenant has a lease that does not carry security of tenure under the Landlord and Tenant Act 1954 (“the Act”) and the lease has expired. Alternatively the lease may be protected by the Act, but, following service by the landlord or tenant of notices under section 25 or section 26 of the Act, the tenant has not taken any steps to issue a claim for a new lease or extend time for doing so.

Often when a tenant remains in occupation it is because negotiations for a new lease are ongoing, and usually in this case the tenant will have a tenancy at will – a type of unprotected tenancy which can be ended at any time.

However, there is a risk that, if the situation is not resolved promptly, the parties can find themselves with an implied periodic tenancy. The legal status of the tenant will always depend on the specific circumstances of each case, but the key factors the courts will look at are whether rent is being paid and accepted, and whether the parties are actively engaged in negotiations for a new lease.

Often when a tenant remains in occupation it is because negotiations for a new lease are ongoing.

It is often landlords who will want to avoid a periodic tenancy arising, as any such tenancy will be protected by the Act (even if the expired lease was itself outside the Act). This means that the tenant will have security of tenure, and the landlord’s ability to terminate the lease will be significantly restricted. Sometimes, though, an implied periodic tenancy could disadvantage the tenant, if the tenant in fact decides that it no longer wants a new tenancy and wants to vacate the premises – the tenant may find itself liable for rent and service charges for a lengthy notice period.

Given the uncertainty in this area and the risks for both landlords and tenants if a periodic tenancy arises, parties should not allow the situation to drift after the expiry of a lease or section 25/section 26 notice. Landlords should ensure that they do not demand or accept rent, and should consider putting written tenancies at will in place if negotiations for a new lease are ongoing. If negotiations stall, immediate action should be taken to regain possession of the premises.

If you have any queries on any of these points please contact our landlord and tenant solicitors.

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Author profile

About this article

Read, listen and watch our latest insights

Pub
  • 08 January 2026
  • Privacy and Data Protection

Data Protection Audits: Launch Event

Join us for a breakfast networking session on Thursday 26th February 2026 as we officially launch our Data Protection Audit services.

art
  • 08 January 2026
  • Privacy and Data Protection

Data Protection – what’s happened in 2025?

2025 has been a lively year for the data protection sphere, with the main talking point coming from the UK’s data reform Bill finally receiving Royal Assent on 19 June 2025.

art
  • 06 January 2026
  • Commercial Real Estate

FAQ – Buying a commercial property in England and Wales

If you want to invest in the commercial property market in England and Wales (the two countries share the same jurisdiction), it is important to understand that the process differs significantly from buying a property in France.

art
  • 05 January 2026
  • Immigration

UK Immigration changes in 2025: What to expect in 2026

This wrap-up brings together the key developments from across the year, highlighting what has changed, what is still evolving, and what organisations should be planning for as we move into 2026.

art
  • 22 December 2025
  • Corporate and M&A

Corporate law in 2025 and looking forward to 2026

2025 has been a transformative year, with a massive paradigm shift from ‘deregulation’ to ‘transparency and accountability’ at Companies House.

Pub
  • 22 December 2025
  • Privacy and Data Protection

GDPR Packages

Our comprehensive GDPR Packages are designed to help organisations navigate the complexities of data protection and ensure compliance with regulatory requirements.