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Renewal of Sublease

QUESTION: My subtenant is vacating premises just three days before my own lease expires. Am I entitled to renew my lease even though I am not in occupation?

You do not need to be in physical occupation of premises to preserve your statutory right under the Landlord and Tenant Act 1954 to the granting of a new lease at the end of the term.

In the recent case of Pointon York Group v Ann Doreen Poulton (Court of Appeal, 2006), the tenant had told the landlord that it tended to reoccupy, and in the last days of its lease, was monitoring the subtenant’s redecoration works and making other arrangements to ensure the premises were ready for occupation.

It was not feasible, however, to complete the move before the expiry of the lease. When the lease expired, the landlord immediately changed the locks and claimed the tenant had lost its right to renew because it was not occupying the premises for the purposes of its business as required by the 1954 act.

The court disagreed and confirmed that physical presence is not necessary, provided the tenant is otherwise using the premises in connection with a business activity, which, by taking active steps to reoccupy, the tenant in this case clearly was.

On a separate issue, the court also held that the tenant’s use of parking places, pursuant to parking rights granted in the lease, also amounted to occupation of the premises.

It appears therefore, that although rare, it is always open to a tenant to revive it’s renewal rights, even when it has sublet for almost the remainder of the term.

You should keep the landlord informed of your plans and be able to demonstrate that you are likely to find that occupation has ceased where the premises have been empty for a matter of months.

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