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
  • 27 April 2026
  • Corporate and M&A

Quarterly Insights: Key Corporate & Commercial Topics – Q2 2026

Join Stuart Mullins and Emma Docking as they explore key corporate and commercial topics, including SME growth and exit strategies for 2026, EMI schemes for employee incentives, and the importance of drag along and tag along rights.

art
  • 22 April 2026
  • Commercial Real Estate

Historic rent reviews: A warning for tenants

We have been asked whether a landlord is able to operate historic rent reviews. 

art
  • 14 April 2026
  • Employment

Updates to Vento Bands 2026: Injury to feelings awards

For discrimination and detriment cases, compensation can also cover non-financial losses, which, in most cases, will include an injury to feelings award.

art
  • 13 April 2026
  • Litigation and dispute resolution

Renters’ Rights Act coming into force on 1 May 2026

The long-awaited Renters’ Rights Act 2025 (RRA) comes into force on 1 May 2026, bringing the biggest changes to the private rental sector since the 1980s. So what do landlords need to know about what is changing?

art
  • 13 April 2026
  • Immigration

Sponsor Licence Compliance in 2026: Increased Scrutiny, Increased Risk – Time to Audit

The Home Office’s latest updates to sponsor guidance in March 2026, alongside broader immigration rule changes introduced this year, signal a decisive shift in the UK’s sponsorship regime.

art
  • 10 April 2026
  • Privacy and Data Protection

Is your tech discriminatory?

Employers are increasingly reliant on technology to assist with all kinds of functions – from strengthening security to streamlining recruitment processes.