Posted Friday 23rd October 2026
A commercial lease renewal can look straightforward: the parties have an established relationship, the tenant is in occupation and the existing lease provides a clear starting point. However, simply changing the dates and rent can preserve historic liabilities, outdated provisions and arrangements that no longer reflect the property or the parties’ commercial needs.
For landlords and occupiers, renewal is an opportunity to address risk, revisit commercial terms and ensure the lease reflects how the property is used today.
Existing dilapidations are often the most important issue where the tenant remains in occupation. The property may already be in disrepair, decorations may be overdue, or alterations may have been carried out without consent or without complying fully with a licence for alterations.
If the renewal lease is unclear, the parties may later dispute whether breaches under the old lease were released, preserved or replaced. A landlord will usually want accrued rights preserved; a tenant should ensure that the renewal neither increases its historic liability nor requires the property to be put into a better condition than the old lease required.
The parties should consider obtaining surveyor input before finalising the renewal terms and review any schedule of dilapidations, schedule of condition, licences for alterations and relevant correspondence. The renewal documents can then state expressly whether historic liabilities are preserved, settled, limited or superseded.
An older lease may have been negotiated for a different market, occupier or method of managing the building. It may contain outdated statutory references, impractical notice provisions or clauses which are no longer suitable for the property.
The lease should therefore be reviewed as a whole. Updates may be appropriate in areas such as electronic communications, energy performance, sustainability, telecommunications, building safety and access for compliance works. However, modern provisions should not be inserted simply because they appear in current precedents; each change should reflect the property and the commercial bargain.
A new lease can also consolidate historic variations, side letters and supplemental documents. A coherent document is much easier to operate and reduces uncertainty if the property is later sold or charged, or the lease is assigned or underlet.
The property may have changed during the existing term through alterations to internal layouts, plant or access routes, or the use of additional areas. The demise and lease plan should be checked against its current configuration.
Rights and reservations should also be reconsidered. The tenant may rely on access, loading, parking, refuse storage, service media, signage or common parts. The landlord may need effective rights of entry for inspection, repair, redevelopment or statutory works.
The parties should identify all previous alterations, whether they were authorised and whether reinstatement is required. Looking forward, the alterations provisions should reflect the tenant’s likely operational needs, including fit-out works, plant, extraction, air conditioning, shopfronts and signage.
Older service charge provisions may be difficult to operate: they may lack clear budgeting and reconciliation machinery, omit services now provided or allow recovery for items no longer relevant. The landlord should ensure that the services match the building’s current management. The tenant should review recoverable costs, its proportion, exclusions and any cap. Existing caps or concessions should not be assumed to continue without express agreement.
Insurance provisions should be checked against the current arrangements, including the insured risks, loss of rent period, excesses and treatment of uninsured risks.
The parties should also revisit permitted use, assignment and underletting, break rights, rent review, rent deposits, guarantees and side letters. If an existing rent deposit is to continue, they should confirm the amount held and the terms for its use or return. Guarantees should not be assumed to continue automatically.
The parties should establish whether the existing tenancy benefits from security of tenure under the Landlord and Tenant Act 1954 and whether the renewed lease is to remain protected or be contracted out. The decision should be made deliberately and documented correctly. It affects the tenant’s ability to seek further renewals and the landlord’s flexibility at the end of the new term.
A lease renewal should not be treated as an administrative extension. While the existing lease provides a useful starting point, it should not dictate the new arrangement by default.
By addressing historic liabilities, updating commercial terms and checking the lease against the property today, landlords and tenants can avoid carrying old problems into a new term. Joelson can advise early in the renewal process, including on existing or potential dilapidations exposure, so that issues are identified before commercial terms are agreed.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
Joelson LLP has joined the Legal Sustainability Alliance (LSA), the UK's leading sustainability network run by law firms, for law firms.
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