Points to consider on the expiry of a commercial lease – vacant possession

Most leases will contain an obligation requiring the tenant to return the premises with “vacant possession” at the end of the term.

There is a general misconception as to what this actually means in practical terms.

Technically, there must be no evidence of the tenant’s continued occupation once the lease comes to an end. In practice, this means that all of the tenant’s property should be removed; tables, chairs, computer cabling, racking and any alterations carried out during the term, irrespective of any perceived benefit such items may be to a future occupier.

As with all lease termination scenarios, it is always advisable to try and engage with the landlord and agree limits as to what will be removed and what will remain. Note that the landlord is under no obligation to enter into such discussions however, so its lack of co-operation is not a reason for not complying with the condition.

If vacant possession is not delivered, the costs incurred by the landlord in remedying the default can be added to any dilapidations claim (please refer to – Points to consider when terminating a commercial lease - dilapidations)

For further information please contact our Commercial Property Team