Informal Letting of Commercial Property 

Being the landlord of a commercial property can come with plenty of issues to contend with, none more so than what to do with an empty property. If attracting a long-term renter is not possible at a particular moment, then the options are whittled down to letting the property stand empty or granting a short-term tenancy.

Such informal lettings can create additional problems though, such as further down the line when a long-term renter does arrive on the scene. Obviously, the landlord will want to evict the short-term tenant and install the longer-term tenant in their place. However, there are laws to obey and the short-term tenant does have rights which must be adhered to.

Below we cover the issues involved with the informal letting of a commercial property.

Termination of Tenancy by the Landlord

The law states that every landlord of any property has the right to evict the tenant, but there are obviously notice periods that must be observed.

There are a number of reasons why a landlord may wish to evict a tenant from a commercial property, and most of these are covered by specific laws that declare ‘forfeiture’, which means the landlord is retaking possession of the property. Examples of this include the tenant’s failure to pay rent or other clear breach of the lease terms.

Long-term tenants of commercial properties always require a significant notice period of the termination of tenancy, of up to six months in many cases. However, informal tenancies operate differently.

If you have granted tenancy to a business on a short-term basis, it is crucial that you include in the contract the notice period which you must allow for the eviction. Without such an inclusion in the agreement, no matter how informal, the tenant could simply refuse to leave which would then require a court order.

Court Procedure for Forfeiture

A landlord begins the court process of forfeiture by applying to retake possession of the property through the local county court. In some cases, the application forms can be filled out and submitted online. The application forms must then be served on the tenant in a timely manner, who then has the right to apply for court relief from the forfeiture claim.

The right to relief is not automatic, although the success of their application will depend on various conditions being met, which includes a timely response to the original forfeiture application. Delayed actions are not advisable for either party.

If the right to relief of forfeiture is granted by the court, then the tenant can continue occupying and operating out of the premises until the expiration of the short-term lease or until the court case has been heard and decided upon.

Advice on Avoiding Tenancy Eviction Problems

In such an instance as that described above, it would be advisable to avoid the forfeiture application if at all possible as it can be a lengthy process which would likely negate the possibilities of installing the new long-term tenant anyway.

This is why it is vital that the possibility of the short-term tenant being evicted at relatively short notice is not only included in any informal agreement, but absolutely understood and prepared for by the tenant themselves.

Allowing a tenant to rent your property without such legally-binding assurances can be much more hassle than it is worth, so make sure to cover all your bases before agreeing to an informal tenancy.

If you need more information or advice about commercial property matters, then contact North Yorkshire Law Solicitors who offer an accessible and practical service to all their commercial property clients, both individuals and businesses.

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