UK Law and Practice Contributed by: Colin Rodrigues and Harminder Sandhu, Hawkins Hatton Corporate Lawyers Ltd
• impact by aircraft and articles dropped from them; • impact by vehicles; • subsidence; • ground slip; • heave; • riot; and • civil commotion. 6.12 Restrictions on the Use of Real Estate The tenant is under obligation to use the prop - erty in accordance with the legal permitted use. See 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law on the new classes of use. In addition, a lease will usually specify that a tenant cannot use the property for any illegal or immoral purpose. Further restrictions on use can be agreed upon as part of the lease negotiations. A landlord can restrict the use of the property by agreement with the tenant. For example, if one tenant on an estate has entered into an exclusivity agree - ment for a specific type of use of a property (eg, an Indian restaurant), the landlord can restrict the use of other properties on the estate within this area in order to comply with the exclusivity agreement. 6.13 Tenant’s Ability to Alter and Improve Real Estate A lease will prohibit the tenant from undertaking any external or internal structural work to the property without the landlord’s consent. Even internal, non-structural alterations to the prop - erty usually require the landlord’s consent in the form of a licence to alter. 6.14 Specific Regulations One of the key statutory regulations which applies to commercial leases is the Landlord and
Tenant Act 1954. This legislation provides busi - ness tenants with security of tenure unless the statutory provisions are formally contracted out. An abundance of statutory regulation applies for residential leases and agricultural tenancies, on which specific advice should always be sought. 6.15 Effect of the Tenant’s Insolvency A lease usually provides that the landlord can end the lease (forfeit) and regain the property if the tenant becomes insolvent. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations If a landlord is concerned about a tenant’s abil - ity to meet its obligations under a lease, it can require a rent deposit for particular rental pay - ments. This usually comprises the payment of up to three months’ rent upfront, which can be used in the event of default. The landlord can also insist on a personal guarantor. 6.17 Right to Occupy After Termination or Expiry of a Lease A business tenant is able to remain in occupation after the expiry of the term of a lease if the lease is not contracted out of the security-of-tenure provisions of the Landlord and Tenant Act 1954. If the lease is protected, the landlord can only bring the lease to an end on the expiry date by providing the tenant with formal notice (of not less than six months and not more than 12 months) that one of the following is applicable to the property: • the tenant has breached a repairing covenant; • the tenant has persistently delayed paying the rent; • the tenant has breached other obligations;
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