How to… deal with business lease renewals

Posted: 20/03/2014

In future, the parties could consider agreeing, say, a 12-month extension under Section 29B of the Landlord and Tenant Act 1954 on condition that the parties refer the determination of the lease terms to PACT.

The points that could be made are:

• The 1954 Act has influenced how commercial property is managed for 60 years. The Act is generally well understood and has also helped to provide stability in the investment market.
• The introduction of tighter case management should encourage parties to consider alternatives. The parties should consider agreeing to extend the time limits under Section 29B of the Act.
• Since 2003, parties have been able to agree to refer their lease renewals to arbitration for determination and be bound by the result without needing to make a Part 8 Claim for a new lease.
• The parties could agree a timetable for agreeing the lease terms and the exchange of expert evidence.
• It would be up to the parties to decide at what point to refer the matter to PACT but normally, this would be after the lease terms have been finalised.
• The parties could consider threatening to seek recovery of their costs if the other party is not prepared to adopt the PACT route.
• Any costs incurred in an abortive PACT application should not be wasted since the time spent should assist in identifying the issues to be considered in the Court proceedings.

This article was published in Estates Gazette in March 2014.

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