31st March 2025

Tenancy at Will in Commercial Property

A tenancy at will in Commercial Property is a type of lease arrangement that allows a tenant to occupy a property without a fixed term, meaning it continues until either the landlord or tenant decides to end it. This arrangement offers flexibility but also lacks long-term security for both parties. There are advantages and disadvantages of parties opting for a tenancy at will rather than a lease, these are discussed later in this article.

 

The key features of a tenancy at will are listed below:

  1. No Fixed Term: Unlike traditional leases, a tenancy at will does not have a specified end date. It remains in effect until one party provides notice to terminate.
  2. Mutual Termination Rights: Either the landlord or tenant can terminate the agreement at any time, usually with reasonable notice. The notice period may be agreed upon or governed by local laws.
  3. Rent Payment: Rent is typically paid on a periodic basis, often monthly. However, the terms can be flexible and negotiated between both parties.
  4. Lack of Security of Tenure: Tenants don’t have long-term protection under tenancy laws, making this arrangement less secure than a fixed-term lease.
  5. Alterations: the tenant’s ability to put their own mark on a property by altering it to suit their branding or requirements is not permitted.
  6. Immediate Termination: In most cases, termination can occur without justification, though the exact legal requirements vary.

 

A tenancy at will can be used during lease negotiations; a tenant may move into a property on a tenancy at will basis while finalising the terms of a formal lease. Additionally, landlords might allow tenants to use a space temporarily, especially if the property is awaiting redevelopment or sale. If a tenant’s fixed-term lease expires and they remain in the property with the landlord’s consent, it may be converted to a tenancy at will upon agreement between the parties. A tenancy at will also offers flexible business operations for startups or short-term projects who may prefer the flexibility of a tenancy at will without the commitment of a long-term lease.

 

The tenancy at will can be terminated by reference to a notice period, usually one month. While each tenancy may vary, a reasonable notice period is typically required. This can be based on how often rent is paid. In some cases, a tenancy at will may end with immediate termination. In cases of non-payment, property damage, or other breaches, landlords may end the tenancy more quickly. Furthermore, an agreement between both parties can end the tenancy, if both parties can mutually agree to terminate the tenancy.

 

To conclude, a tenancy at will is a flexible option for commercial tenants and landlords who need temporary arrangements or are in a transitional phase. However, both parties should carefully document the terms and be aware of the risks associated with the lack of long-term security.

 

For advice on this topic, or another Commercial Property matter, contact a member of our expert team today at info@bussmurton.co.uk or call 01892 510 222.

Olusola Makinde

Olusola Makinde
Solicitor