How to Handle a Commercial Lease Renewal Dispute

By teammonarch
Last updated on February 4, 2026

Renewing a commercial lease should be a straightforward process, but when disagreements arise between landlords and tenants, it can quickly escalate into a legal dispute. Whether the disagreement is about rent increases, lease terms, or whether the lease should be renewed at all, it’s important to understand your legal rights and the steps involved in resolving these issues effectively.

In this blog, we explain how commercial lease renewals work in the UK, what typically causes disputes, and how businesses can handle these situations without jeopardising their premises or operations.

Understanding Commercial Lease Renewals in the UK

Under the Landlord and Tenant Act 1954, most business tenants have a legal right to renew their lease once the fixed term expires. This Act gives business tenants security of tenure, meaning they cannot be forced out without proper notice or a valid legal reason.

However, disputes often arise during this renewal process, especially when:

The landlord wants to raise the rent significantly
The landlord refuses renewal and tries to evict the tenant
The parties cannot agree on new lease terms
Either party fails to follow the correct legal procedure

Common Causes of Lease Renewal Disputes

Disputes between landlords and tenants during lease renewal typically fall into one of the following categories:

1. Rent Disagreements

One of the most frequent flashpoints is rent. The landlord may propose a substantial rent increase, citing market rates, while the tenant may argue for a more modest adjustment based on footfall, economic conditions, or lease comparables.

2. Changes to Lease Terms

Landlords may want to change the terms of the lease, for example, adding break clauses, restricting permitted use, or altering repair obligations. These changes can significantly affect the tenant’s business and are often resisted.

3. Refusal to Renew

While tenants usually have the right to a new lease, a landlord can oppose renewal on specific statutory grounds under the 1954 Act. These include:

Breach of obligations by the tenant (e.g. failing to maintain the property)
The landlord intends to redevelop the property
The landlord wants to occupy the premises themselves

A landlord must serve a Section 25 Notice (if they wish to end or change the lease) or the tenant must serve a Section 26 Request (if they want to propose a new lease).

Legal Process for Commercial Lease Renewal Disputes

If agreement can’t be reached through informal negotiations, the following legal steps are typically involved:

Step 1: Notice Served

Either party serves formal notice under the 1954 Act. This sets the timetable in motion and outlines intentions.

Section 25 Notice – issued by landlords to propose new terms or oppose renewal
Section 26 Request – issued by tenants to request a new lease

Step 2: Negotiations Begin

After notice is served, both parties typically enter into negotiations to agree on rent and terms. This is often done with the assistance of surveyors or solicitors.

Step 3: Court Application (if no agreement)

If no agreement is reached, either party may apply to the court for a decision on the new lease. The court will consider:

The current market rent
The terms of the previous lease
Any reasonable changes proposed
Whether the landlord has valid grounds to refuse renewal

The court cannot force the landlord to grant a new lease if a statutory ground for refusal is proven.

Strategies to Resolve Commercial Lease Renewal Disputes

1. Start Negotiations Early

Leaving lease negotiations to the last minute puts pressure on the tenant, especially if a dispute arises. Starting discussions 6–12 months before lease expiry gives both parties time to resolve matters calmly.

2. Take Legal Advice Immediately

Early legal advice ensures you understand your rights and avoid procedural mistakes (e.g. missing deadlines for notices or court applications). A solicitor can also help you assess whether the landlord’s grounds for refusal are valid.

3. Instruct a Surveyor

A commercial property surveyor can help determine the market rent and provide evidence to support your position in negotiations or in court. This is particularly useful when rent is in dispute.

4. Consider Mediation

If negotiations stall, mediation can be a cost-effective way to avoid court. A trained mediator helps both sides find a middle ground without the need for litigation.

Tenant Rights: Can a Landlord Refuse to Renew?

Tenants protected by the Landlord and Tenant Act 1954 have strong rights, but these are not absolute.

Landlords can oppose renewal only on specific statutory grounds. These are set out in Section 30 of the Act, and include:

Persistent breach of repairing obligations
Substantial rent arrears
Unauthorised subletting
Intention to redevelop or occupy the premises themselves

Even if a landlord refuses renewal, they must prove these grounds in court. If they succeed, the tenant may not be entitled to a new lease and may have to vacate.

What to Do If You’re Facing a Lease Renewal Dispute

Whether you’re a tenant or landlord, taking proactive legal steps is essential. Here’s what you should do:

If you’re a tenant:

Review your lease expiry date and start planning early
Instruct a solicitor to advise on your rights under the 1954 Act
Gather evidence (e.g. maintenance records, rent comparisons) to support your case
If served a Section 25 notice refusing renewal, seek legal help urgently

If you’re a landlord:

Serve a valid Section 25 notice in good time
If opposing renewal, ensure your grounds are legally valid and supported by evidence
Engage surveyors and solicitors to negotiate terms or support your case in court

Why Lease Renewal Disputes Can Be Costly

A poorly handled lease renewal dispute can lead to:

Business disruption if a tenant is forced to relocate
Loss of goodwill or custom from moving premises
Expensive court proceedings if disputes escalate
Reputational damage for landlords if perceived as unfair

Both sides benefit from a timely, well-managed process that avoids unnecessary confrontation.

How Monarch Solicitors Can Help

At Monarch Solicitors, we specialise in commercial property law, including lease renewals and disputes under the Landlord and Tenant Act 1954. Whether you’re a tenant seeking to protect your business premises or a landlord managing property assets, our solicitors offer strategic, practical advice tailored to your objectives.

Our legal team can: