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Landlords and tenants use commercial lease agreements to legally enforce their rental arrangements. This means that both parties are aware of their obligations are do their utmost to uphold them. In the case that either party is not able to uphold their obligations, the other party will be able to seek compensation through the court system. As a landlord, there may be a point during the commercial lease where you have to give notice to your tenant. This may be because you are renovating the property or are looking at selling it. Whatever the reason may be, you must adhere to the law when you do this. This article will outline what the commercial lease requirements are for notice periods.

What Are Notice Periods?

The notice period is the amount of time you must give either your tenant or landlord before ending a commercial lease. Cancelling a commercial lease means the tenancy ends, and you can do what you want with the property. This happens if the tenant has breached the lease. Tenants might also want to end their lease early because: 

  • they have found other premises; or 
  • it is getting too expensive. 

It is crucial that you give enough notice before you end your tenancy as a landlord, as the law tries to give tenants more rights when it comes to commercial leases. As a landlord, if you end the lease without the proper notice period, you might be found to be in breach of your lease agreement and liable to legal proceedings. 

Why Do We Have Notice Periods?

The law establishes notice periods so that tenants can find new premises before they are required to leave their old ones. If not for notice periods, landlords would be able to kick tenants out of their property without them knowing where they will move to. This would create issues for commercial businesses as they would have no certainty, and it would be especially disastrous for businesses that are location specific.

What Are Some Common Reasons for Landlords to Use Notice Periods?

The main reasons why landlords might issue notice is because the tenant is not paying their rent or not paying it on time. This is considered a breach of the lease agreement. If a tenant is not paying their rent, then a landlord is entitled to issue a notice so that they can lease their premises to someone who is going to pay rent. However, if you are a landlord, it is always best to talk to your tenant first to see if they have any other way of paying rent. For example, you could agree to: 

  • drop the rent for a period of time; or 
  • let them pay it in smaller instalments.

This is because your tenant may be going through a rough patch in their business and will soon be able to pay consistent rent.

What Are the Notice Periods?

The requirements for notice periods in New Zealand changed recently. Previously a landlord was able to give ten days notice before cancelling a commercial lease. However, a law change now gives more rights to tenants. Now a landlord must give 30 days before they can cancel a lease. The notice must contain the nature of the breach and how the tenant can rectify it. This is a significant change, and it allows tenants who may be late on rental payments to try and make them up or negotiate new rental arrangements with the landlord. 

Cancelling the Lease

Once the notice period has elapsed, you are able to cancel the lease. If your tenant is refusing to leave your property, you can enter the property and change the locks. You can only do this during the day, and you must not breach the peace when you do this. Alternatively, you can ask the court to order a declaration that the tenant must leave the property. 

As with any legal decision you make, you should always consult a lawyer. 

Key Takeaways

Commercial leases are essential for the proper functioning of any tenancy and give you legal options if something were to go wrong. If your tenant has breached your lease, then you can cancel the lease. To do this, you must issue a notice. This must contain what the breach was and how your tenant can rectify it. If they do not rectify this on time, then you can cancel the lease. Additionally, if your tenant refuses to leave, then you are allowed to change the locks on the property. If you need any legal assistance with notice requirements, contact LegalVision’s property and leasing lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Can I give notice if a tenant hasn’t breached a contract?

If you have a fixed-term tenancy, you can only cancel the contract if your tenant has breached the contract.

If I have given the appropriate notice can I cancel the lease?

Yes, once you have given the appropriate notice, then the tenant must leave the property and the premises is yours to do as you please.

Are notice periods different for residential tenancies?

Yes, there are different rules that govern the requirements for how landlords can give notice to residential tenants.

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