Landlord and Tenant Act 1954
What happens when a commercial lease expires?
In shortIf a business tenancy is protected by the 1954 Act, it does not end on its contractual expiry date: section 24 continues it on the same terms until ended by a section 25 notice, a section 26 request, a section 27 notice or a court order — so a tenant holding over keeps paying the passing rent, subject to interim rent.
Key facts
- Protected lease
- Continues automatically under section 24
- Rent while holding over
- Passing rent, unless interim rent is applied for
- Contracted-out lease
- Ends on the term date; holding over is at will
- Tenant exit
- Section 27 notice, at least 3 months
- Risk
- Occupying a contracted-out property can create a new tenancy
Protected leases: the statutory continuation
Section 24 is the engine of the Act. A tenancy that is protected simply carries on after the contractual term date on the same terms, including the same rent, until one of the statutory routes ends it. Nothing needs to be signed or agreed for that to happen, and the tenant is not a trespasser.
This continuation is why holding over is often financially attractive to a tenant in a falling market and expensive for a landlord in a rising one — hence the interim rent mechanism, which lets either party apply for a market figure while the renewal runs.
Contracted-out leases: no continuation
Where the parties validly contracted out under section 38A, the lease simply ends on the term date. If the tenant stays on with the landlord's agreement, the arrangement is usually a tenancy at will or a periodic tenancy, and the parties should document which.
Landlords should take care: accepting rent for a fixed period after expiry of a contracted-out lease can create a new periodic tenancy which is itself protected, because the contracting-out applied to the old lease only.
Ending the holding over
A landlord ends the continuation with a section 25 notice giving six to twelve months. A tenant who wants to renew serves a section 26 request; a tenant who wants out serves a section 27 notice — three months' notice under section 27(2) if the term date has already passed — or simply gives up occupation before the term date under section 27(1A).
- Landlord: section 25 notice, 6–12 months
- Tenant renewing: section 26 request, 6–12 months
- Tenant leaving after the term date: section 27(2), at least 3 months
- Either party: agree a new lease and complete it
Common questions
Can I stay in my premises after the lease expires?
If the tenancy is protected by the 1954 Act, yes — section 24 continues it automatically until it is properly ended. If the lease was contracted out, you need the landlord's agreement.
What rent do I pay while holding over?
The rent under the expired lease continues, unless either party applies for an interim rent under section 24A.
How do I end a tenancy I am holding over on?
As tenant, serve a section 27 notice giving at least three months. As landlord, serve a section 25 notice giving six to twelve months.
The provisions behind this guide
Related guides
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General information on business lease renewal under Part II of the Landlord and Tenant Act 1954 in England and Wales. It is not legal advice, and deadlines under the Act are unforgiving — take advice on your own notices and dates before acting.