{"id":1547,"date":"2023-10-27T00:00:00","date_gmt":"2023-10-27T00:00:00","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/"},"modified":"2025-05-22T13:12:52","modified_gmt":"2025-05-22T13:12:52","slug":"terminating-commercial-lease-agreement","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/","title":{"rendered":"Commercial lease agreement: termination of lease examples"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Do you want to end a commercial lease agreement? And what are the different notices you need to serve?<\/p>\n\n<p class=\"wp-block-paragraph\">If you\u2019re not sure where to start, our guide covers the Landlord and Tenant Act 1954 and some of the scenarios you might face.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What happens when a commercial lease agreement expires?<\/h2>\n\n<p class=\"wp-block-paragraph\">This guide covers what you need to do if you or your tenant wants to end a commercial lease agreement after it\u2019s expired.<\/p>\n\n<p class=\"wp-block-paragraph\">If your tenant wants to end the lease early, this is known as a surrender of lease. You should research your options in this scenario and get specific legal advice.<\/p>\n\n<h3 class=\"wp-block-heading\">The 1954 Act<\/h3>\n\n<p class=\"wp-block-paragraph\">There are automatic protections in place for tenants under the Landlord and Tenant Act 1954 (the 1954 Act). Commercial landlords need to be aware of these, and we\u2019ll cover them before explaining the specific lease termination sections.<\/p>\n\n<p class=\"wp-block-paragraph\">The 1954 Act gives your tenants the right to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\">lawfully stay on the premises, using the same terms as their existing lease (when it expires), and<\/li>\n\n\n\n<li class=\"wp-block-list-item\">ask the court for a new lease if you can\u2019t agree on terms (known as \u2018security of tenure\u2019)<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">For more control over your property and end-of-lease terms, you may want to exclude these rights or agree to new ones. However, this requires a formal procedure complete with notices and declarations, so that the tenant understands the rights they\u2019re giving up.<\/p>\n\n<h2 class=\"wp-block-heading\">Terminating a commercial lease agreement<\/h2>\n\n<p class=\"wp-block-paragraph\">Assuming you haven\u2019t decided to exclude your tenant\u2019s rights (see above), and these are protected as usual, your commercial tenancy agreement will carry on until it\u2019s ended in a way that\u2019s allowed under the 1954 Act.<\/p>\n\n<p class=\"wp-block-paragraph\">Your tenant might decide that once their tenancy has expired, they don\u2019t want to stay on. If they decide this before the contractual end date has passed and they\u2019ve vacated the premises, your lease comes to a natural end, in-line with the agreement you have in place.<\/p>\n\n<p class=\"wp-block-paragraph\">If they remain on the premises and then decide to leave after the end date, they\u2019ll need to give you three months\u2019 notice using a <strong>Section 27 notice<\/strong> (see below). You\u2019ll begin a \u2018tenancy at will\u2019 for this period.<\/p>\n\n<div id=\"nba-body-001\">\n<\/div>\n\n<h2 class=\"wp-block-heading\" id=\"section25noticelandlordterminatingthecommercialleaseagreement\">Section 25 notice (landlord terminating the commercial lease agreement)<\/h2>\n\n<p class=\"wp-block-paragraph\">You can give your tenant notice that you plan to end their tenancy with a Section 25 notice (sometimes called an <strong>S25 notice<\/strong>). This confirms:<\/p>\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\">the end date for your existing lease<\/li>\n\n\n\n<li class=\"wp-block-list-item\">that you won\u2019t oppose a renewal, or<\/li>\n\n\n\n<li class=\"wp-block-list-item\">that you don\u2019t want to renew, for reasons you\u2019ve legally set out<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><strong>Terminating a commercial lease agreement?<\/strong> Use the Section 25 notice template to get the ball rolling.<\/p>\n\n<p class=\"wp-block-paragraph\">This template\u2019s wording is statutory, so don\u2019t change it unless you\u2019re adding the required information. You\u2019ll also need to include the notes that go with the template or your notice won\u2019t be valid.<\/p>\n\n<h3 class=\"wp-block-heading\" id=\"section25timeframes\">Section 25 timeframes<\/h3>\n\n<p class=\"wp-block-paragraph\">Strict timings apply to a Section 25 notice. You\u2019ll need to serve it between six and 12 months before the end of your contractual term. And if your tenant has already given you formal notice that they want to renew the lease (see Section 26 notice below), you can\u2019t serve it.<\/p>\n\n<p class=\"wp-block-paragraph\"><strong>If your lease is already in its final six months (or has expired), you\u2019ll still need to provide at least six months\u2019 notice.<\/strong><\/p>\n\n<h3 class=\"wp-block-heading\" id=\"whatifyourtenantdoesntwanttoterminatetheleaseagreement\">What if your tenant doesn\u2019t want to terminate the lease agreement?<\/h3>\n\n<p class=\"wp-block-paragraph\">If you\u2019ve served a Section 25 notice but your tenant wants to stay, these are the legal steps you should take:<\/p>\n\n<ol class=\"wp-block-list\">\n<li class=\"wp-block-list-item\">Serve a Section 25 notice, using recorded or special delivery.<\/li>\n\n\n\n<li class=\"wp-block-list-item\">If they don\u2019t want to leave, your tenant will need to send you a \u2018counter notice\u2019, using the format prescribed in your Section 25 notice notes (included in our Section 25 notice template).<\/li>\n\n\n\n<li class=\"wp-block-list-item\">Try to negotiate a compromise.<\/li>\n\n\n\n<li class=\"wp-block-list-item\">If you can\u2019t agree, you\u2019ll need to apply for a court order, giving you the right to take possession of the property.<\/li>\n\n\n\n<li class=\"wp-block-list-item\">Your tenant can choose to make a counter application to the court (asking for a new lease), and the court will make a final decision.<\/li>\n<\/ol>\n\n<p class=\"wp-block-paragraph\">Taking matters this far is expensive for all parties, and often the landlord and tenant reach an agreement along the way. Some landlords offer a financial incentive (for example a month rent free) in return for a quick resolution.<\/p>\n\n<h2 class=\"wp-block-heading\" id=\"section26noticetenantrequestsanewleaseagreement\">Section 26 notice (tenant requests a new lease agreement)<\/h2>\n\n<p class=\"wp-block-paragraph\">If your tenant wants to stay and you haven\u2019t issued a Section 25 notice (see above) to terminate the commercial lease agreement, they may send a request for a new lease. This is known as a Section 26 notice or <strong>S26 notice<\/strong>. Again it\u2019s written in statutory wording, required by law.<\/p>\n\n<p class=\"wp-block-paragraph\">The schedule that comes with the Section 26 notice allows your tenant to set out the terms they\u2019d like for the new lease. If you can\u2019t agree to these terms, a court can intervene and make the decision for you both.<\/p>\n\n<p class=\"wp-block-paragraph\">Your tenant can use the Section 26 notice template for this, but remember, they should only edit it to add the required information.<\/p>\n\n<h2 class=\"wp-block-heading\" id=\"section27noticeterminationbytenantofleaseagreementafterexpiry\">Section 27 notice (termination by tenant of lease agreement after expiry)<\/h2>\n\n<p class=\"wp-block-paragraph\">If your tenant stays on the premises and only decides they want to leave after the contract is expired, they\u2019ll need to give you three months\u2019 notice with a Section 27 notice (sometimes called an <strong>S27 notice<\/strong>).<\/p>\n\n<p class=\"wp-block-paragraph\">You can give them the Section 27 notice template to help them with this. The wording is much less formal than in the Section 25 notice template, but they should send it to you with their intentions set out clearly in a letter format by recorded delivery.<\/p>\n\n<p class=\"wp-block-paragraph\">Once a Section 27 notice is served, it\u2019s irrevocable. Your tenant won\u2019t have a legal right to stay on the premises after the termination date has passed.<\/p>\n\n<p class=\"wp-block-paragraph\">If your tenant has served you with a Section 26 notice (see above) to renew the lease, they can\u2019t send a Section 27 notice to \u2018undo\u2019 this. However, they can serve a Section 27 notice to come into effect after their Section 26 notice end date has passed.<\/p>\n\n<h2 class=\"wp-block-heading\" id=\"whathappensifidonothing\">What happens if I do nothing?<\/h2>\n\n<p class=\"wp-block-paragraph\">Unless you\u2019ve terminated the tenancy with one of these notices, it carries on under the same terms as the original lease. The rent will also be fixed at the amount being paid before the contractual termination date.<\/p>\n\n<p class=\"wp-block-paragraph\"><strong>Do you have any questions about terminating a commercial lease? Let us know in the comments below.<\/strong><\/p>\n\n<h3 class=\"wp-block-heading\">More guides for landlords<\/h3>\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\"><a href=\"\/knowledge\/commercial-landlord\/what-are-a-commercial-landlords-responsibilities\/\" data-type=\"knowledge\" data-id=\"815\" >Letting commercial properties: what are my responsibilities?<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"\/knowledge\/tenants\/assured-shorthold-tenancy-agreement\/\" data-type=\"knowledge\" data-id=\"1325\" >Assured shorthold tenancy agreement template<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"\/knowledge\/tenants\/what-is-a-guarantor\/\" data-type=\"knowledge\" data-id=\"1566\" >What is a guarantor? A guide for landlords<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"\/landlord-insurance\/faq\/what-is-landlord-insurance\/\">What is landlord insurance?<\/a><\/li>\n<\/ul>\n\n<div id=\"nba-upsell-001\" class=\"wp-block-group has-azure-200-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-94e519ba wp-block-group-is-layout-constrained\" style=\"padding-top:var(--wp--preset--spacing--80);padding-right:var(--wp--preset--spacing--40);padding-bottom:var(--wp--preset--spacing--80);padding-left:var(--wp--preset--spacing--40)\">\n<h3 class=\"wp-block-heading has-text-align-center\">Ready to set up your cover?<\/h3>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">As one of the UK&#8217;s biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-a89b3969 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/quote.simplybusiness.co.uk\/\">Start your quote<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n<div id=\"nba-body-end\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you or your tenant wants to end a commercial lease agreement, you need to understand the Landlord and Tenant Act 1954.<\/p>\n","protected":false},"author":3,"featured_media":2995,"comment_status":"open","ping_status":"closed","template":"","meta":{"sb_hreflang":"","sb_hreflang_url":"","disable_breadcrumbs":false,"sb_breadcrumbs":[],"sb_reviewed_by":"","sb_review_date":"","sb_enable_content_gating":true,"footnotes":""},"categories":[336,340,114],"hidden-category":[],"coauthors":[20],"class_list":["post-1547","knowledge","type-knowledge","status-publish","has-post-thumbnail","hentry","category-business-structure","category-commercial-landlord","category-landlord-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Commercial lease agreement: termination of lease examples<\/title>\n<meta name=\"description\" content=\"If you or your tenant wants to end a commercial lease agreement, you need to understand the Landlord and Tenant Act 1954.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Commercial lease agreement: termination of lease examples\" \/>\n<meta property=\"og:description\" content=\"If you or your tenant wants to end a commercial lease agreement, there are laws you need to know.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/\" \/>\n<meta property=\"og:site_name\" content=\"Simply Business UK\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/simplybusiness\" \/>\n<meta property=\"article:modified_time\" content=\"2025-05-22T13:12:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/06\/1-terminating-commercial-lease-agreement.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@simplybusiness\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"6 minutes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data2\" content=\"Conor Shilling\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/commercial-landlord\/terminating-commercial-lease-agreement\/\"},\"author\":{\"@type\":\"Person\",\"name\":\"Conor Shilling\",\"description\":\"Conor Shilling is a professional writer with over 10 years\u2019 experience across the property, small business, and insurance sectors. 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