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

art
  • 13 May 2026
  • Employment

10 top tips for negotiating a redundancy settlement agreement, for employers and employees

Redundancies are on the rise, resulting in increased use of settlement agreements. We’ve compiled our top 10 tips for drafting and negotiating these agreements to support both employers and employees through this challenging process.

art
  • 12 May 2026
  • Immigration

Supplementary Employment: When is it Allowed under UK Immigration Rules?

This article provides a guidance to understanding the rules on supplementary employment in the UK.

Pub
  • 11 May 2026
  • Immigration

How to prepare for Sponsor Licence Compliance in 2026: Essential tips for UK employers

Join immigration experts Ruth Karimatsenga and Monica Mastropasqua for an in-depth podcast discussion on sponsor licence compliance in 2026.

Pub
  • 07 May 2026
  • Employment

Employment Rights Act 2025: Key Changes for Employers

Join Katie Glendinning and Lucy White for a live webinar as they break down the key changes introduced by the Employment Rights Act 2025, offering clear insights into what these reforms mean in practice for employers and HR professionals.

art
  • 07 May 2026
  • Public Procurement

What the First Procurement Act 2023 Judgment Means for Automatic Suspension

It has been more than a year since the Procurement Act 2023 (PA23) came into force in February 2025, and the long wait for the first High Court judgment on the Act to be published is finally over.

art
  • 06 May 2026
  • Corporate and M&A

Community Interest Companies – What do you need to know?

This article seeks to provide an overview of the CIC structure’s key characteristics, the types of enterprises it suits, and some practical tips on the application process.