Notices To Renew
Lease Series: Three of Four
There is s hidden trap in the Retail Leases Act that landlords should be aware of: make sure you give your tenants notice in writing of the last date they can exercise their option to renew.
Most landlords miss this requirement, and even some managing agents miss this requirement. You must diarise to give your tenant notice.
Under section 28 of the Retail Leases Act, the landlord must give the tenant 6 months notice of the last date they have to renew their option under the lease.
If no notice is given, or the notice is given late, the last date that the tenant has to renew the lease is extended by 6 months!
This usually doesnâ€™t operate to extend the further term of the lease, because by the time the tenant takes up the option to renew the lease, the option date is generally back-dated to the date referred to in the original lease.
However, if you never give your tenant notice, then the lease will potentially continue on an over-holding basis until you finally give your tenant the notice, and a further six months has expired. Donâ€™t expect that your tenant will just leave at the end of the term.