REALWorld Law

Commercial leases

Recovering real estate from a lessee

What does a lessor need to do to ensure that a lessee leaves on the date originally agreed?

Angola

Angola

If the parties have entered an automatically renewable lease, the lessor is not entitled to prevent such automatic renewals and thus the contract may only be terminated in the specific cases set forth in the law.

If the parties have entered a lease for a fixed period of time of more than a five-year term, and the lessor has terminated the agreement by sending a written notice to the lessee, within the agreed notice period, upon termination of the lease, the lessor may start legal action for eviction.

Australia

Australia

Most leases provide that the tenant must vacate the premises on or before the expiry date (subject to any option to renew or holding over provision). If the tenant does not vacate, the tenant is considered a trespasser and the landlord can take immediate action to have the tenant removed.

Belgium

Belgium

General leases (offices, warehouses, industrial buildings)

A written lease with a fixed term ceases automatically on the expiry of the specified term, with no requirement to give notice of termination (unless agreed otherwise). If the term of the lease is indefinite (or where the lease is in the form of an oral agreement), a notice of termination of a reasonable length (depending on the lease period which has expired) of between one to six months is required.

Following termination or expiry of the lease the landlord is entitled to file a claim to recover possession. It can take several months to obtain a judgment requiring the tenant to vacate the premises. If the tenant fails to comply with the judgment, the landlord may be forced to evict the tenant with the help of a bailiff.

Commercial leases (retail and workshops)

Since a commercial lease always has a fixed duration, which automatically ceases on expiry of the term, there is no need to give notice of termination (unless agreed otherwise). The same process applies to recovering possession as for general leases.

Bosnia-Herzegovina

Bosnia-Herzegovina

If a tenant refuses to leave the premises on the date originally agreed, the landlord will need to obtain a court order to recover possession. This can take several months. However, if the tenant continues to use the real estate after the date the lease agreement ends and the landlord does not initiate court proceedings, the lease is regarded as having been extended indefinitely. The landlord is deemed as having agreed to such an extension if he has not required the tenant to leave the premises or initiated court proceedings within 15 days of the end of the lease.

Canada

Canada

Unless a common law or statutory rule is engaged, or unless the lease permits a holding-over period, tenants who continue to possess the leased property after the lease’s termination can be treated as trespassers and the landlord can take immediate action to remove the tenant, which may include an order for possession from the relevant Court.

China

China

If the lease is terminated and the lessee fails to vacate the premises, the lessor has a right to demand rent covering the entire period of the delay in vacating. All risks occurring during this period will be borne by the lessee. Penalties for the late return of the premises can also be set out in the lease contract.

Croatia

Croatia

Unlike leases of flats, business leases are not automatically extended if the parties take no action. If the tenant refuses to move out, then the landlord has the right to bring a possession claim before the court.

Czech Republic

Czech Republic

If the lease is terminated and the lessee fails to vacate the premises, the lessor may require the lessee to vacate the premises within one month from the termination of the lease. Should the lessee fail to vacate the premises, the lessor may seek a court order to enable possession to be recovered. This can take from several months to several years.

Should the lessee use the premises after the lease expires, automatic renewal of the lease does not apply where the lessee previously indicated that it would terminate the lease.

Denmark

Denmark

If the lessor and the lessee have agreed on a time-limited contract, the lessor is not obliged to act. The lessee on the other hand is obliged to leave the lease on the date originally agreed on.

France

France

Legal proceedings for the recovery of premises by the landlord usually take a year or more. They may require the assistance of a bailiff and even that of law enforcement.

Eviction proceedings can be undertaken throughout the year for commercial premises but not during the winter months in relation to residential premises (this winter moratorium period is defined by law).

Germany

Germany

The landlord is entitled to file a claim to recover possession. It may take six months or more to obtain a judgment requiring the tenant to vacate. If the tenant fails to comply with such a judgment, the landlord may be forced to evict the tenant with the help of a bailiff. However, if the landlord files the claim prior to the expiry of the term of the lease, when there is no indication of any risk that the tenant will not move out, he may be obliged to bear the costs of the lawsuit, including the costs of the tenant's lawyer in cases where the tenant immediately accepts the landlord's claim. As a consequence, landlords do not usually file claims for repossession before the expiry of the lease unless there is reason to believe that the tenant will not vacate the property on the due date.

Hong Kong, SAR

Hong Kong, SAR

The lessor can provide oral or written notice within the time as stipulated in the lease to the lessee or within a reasonable time if the lease does not provide any requirement as to notice prior to the expiration of the date of the lease to ensure that the lessee has sufficient time and notice to move out of the premises.

Hungary

Hungary

It is recommended to agree on a method and timetable for the vacation and return of the leased premises by tenant in the lease agreement. Additionally, the landlord may require the tenant to deliver an eviction consent declaration to be issued by tenant in the form of a notarial deed, upon signing the lease agreement. The landlord, relying on the notarial deed, is able to start eviction enforcement proceedings without the need to go to trial, allowing the tenant to be evicted from the leased premises within a short period of time.

If tenant has not delivered an eviction consent declaration in the form of a notarial deed to the landlord, then the landlord can seek a court order and judicial enforcement to enable it to recover possession of the premises.

Ireland

Ireland

When the term specified in the lease is coming to an end, the landlord may, as a courtesy, send a reminder to the tenant that the end of the term is approaching and that vacant possession of the property will be required on the termination date. There is no specific need to serve a notice to vacate. If the tenant does not leave the property by this date then the landlord will need to issue proceedings through the courts to obtain possession.

Italy

Italy

If the tenant does not return the premises once the lease contract expires, the landlord would need to start an eviction proceeding before the relevant court in order to obtain a judicial eviction order and the subsequent property release. This can take several months.

Japan

Japan

In order to ensure that a lessee leaves on the date originally agreed, a lessor must execute a fixed-term lease (as opposed to an ordinary lease) and fulfill the obligationsenumerated in the ‘Security of tenure’ section above concerning termination of a fixed-term lease.  The parties often agree that should the lessee not vacate the premises at the end of the fixed lease term, the lessee shall pay to the lessor damages equivalent to twice the original rent amount.

Netherlands

Netherlands

Industrial leases and leases of other types of commercial space (office, business space, non-retail)

The lease terminates if one of the parties has duly given notice of termination of the lease with due regard of the notice period. Such notice must be given before the end of the lease. In order to secure the removal of the lessee, the lessor must also give the lessee notice to vacate. The lessee's obligation to vacate is suspended for a period of two months by law as from the date of vacation specified in the notice to vacate. The lessee can request the court to extend the suspension period to up to one year, which extension will be granted by the court if the interests of the lessee (to stay in the leased space) are of more weight than the interests of the lessor (to evict the leased space). The lessee can submit a request for a one-year extension twice more. If the lessee does not make use of the suspension period or if the suspension period has expired, the lessor may commence eviction proceedings, if necessary.

Retail leases (including hotels and restaurants)

The lease can only be terminated as per the end of the relevant period by giving written notice of termination. The lessor must observe a mandatory notice period of at least one year. The lessor is obliged to include a statutory ground for the termination in its notice.

The ground on which is most frequently relied, is the ground that the lessor urgently needs the leased premises for its own use (including in some circumstances to carry out a renovation).

On the expiry of a period of at least ten years, the lessor has, by law, an additional ground for termination: the general balance of interests.

The lessee is not obliged to accept a termination of the lease by the lessor. In the event that the lessee disagrees with the termination, the lessor must request the court to terminate the lease. The lessee can stay in the premises until the court renders an irrevocable decision.

Dutch case law indicates that the lessee usually has significant protection against termination.

Nigeria

Nigeria

Where the lessor has no intention of renewing the lease, it should engage with the lessee to agree on delivery of possession within a reasonable period before the expiry of the lease and also ensure that all notices are issued within time. This is to give sufficient time for the lessee to make preparation to vacate the property and for the lessor to comply with the legal prerequisite of issuance of appropriate notices. The lessor should be prepared to take legal action immediately if the lessee holds over possession after the date agreed.

A lessee is shielded from forceful eviction upon expiry of the lease if it is convenient to remain in possession for as long as the eviction process will take and at the same rental. Therefore, contractual conditions that make it inconvenient and costly for the lessee to breach its obligations including holding over after expiry should be considered. Such provisions to include the lessee indemnifying the lessor against liabilities arising where certain services which are obligations on the part of the lessor are withdrawn after expiry and higher rates as mesne profits payable on the property by the lessee after expiry.

Norway

Norway

The tenant has no automatic right to renew where the lease is for a fixed term unless this is stipulated explicitly. However, a landlord cannot ensure that a tenant leaves on the date originally agreed on this basis alone so commercial leases normally include provisions for recovering vacant possession without court proceedings after the term of the lease has expired. The tenant has a right to receive a prior warning and an opportunity to rectify any breaches of the lease before losing possession of the property. Eviction usually takes between six and 16 weeks, but this can vary depending on the workload of the Execution and Enforcement Commissioner.

If the contract does not contain an eviction clause then the landlord must obtain a court order.

Poland

Poland

Tenants enjoy security of possession as long as they have the benefit of a binding lease agreement in relation to the leased property. The landlord cannot force the tenant to leave the property without an enforcement order from the court. The tenant can, by a notarial deed, agree to accept enforcement proceedings for eviction. This reduces the amount of time it takes to obtain a court order since the court's role is then limited to verifying the validity of the notarial deed.

However, the eviction orders are not executed in the period between 1 November and 31 March next year, if the premise for temporary purposes was not indicated to the person to be evicted.

Portugal

Portugal

With the termination of the contract, the landlord may start legal action for the eviction or for the recovery of possession of the property.

With the coming into force of Law 31/2012, which amended Law 6/2006, a new legal action for recovering the possession of real estate has been created. This is called the Procedimento Especial de Despejo (Special Procedure for Eviction). It is a remedy that is intended to effect the termination of the lease, if the tenant does not vacate the leased property on the required date.

This special procedure is intended to be simpler and faster than a normal lawsuit. It is started and may conclude out of court, in the Balcão Nacional do Arrendamento (National Lease Bureau), where the petition for eviction is presented. If the tenant does not put up a defence, the Lease Bureau converts the petition for eviction into an order requiring the vacation of the leased property. If the tenant does put up a defence, the Lease Bureau refers the case to the court. In court the case is considered as an urgent matter, with a faster process and shorter deadlines than in a normal lawsuit.

Romania

Romania

Where the lease agreement is entered into for a definite period of time, the agreement terminates at the expiry of the lease term and there is no obligation for the landlord to give any prior notice or to renew the lease agreement.

Lease agreements entered into for an undefined term may be unilaterally terminated by either party by serving a termination notice to the other party specifying a reasonable period of time for the arrangement to come to an end. Except in respect of leases of dwellings and leases involving a professional, Romanian statutory provisions do not impose any particular legal notice period to be given by the parties in a unilateral termination of the lease agreement. However, it is market practice for the parties to include in the lease agreement the length of the relevant notice period (eg standard practice would be for a lease agreement with a duration of 10 years to require any termination notice delivered to the other party at least six months prior to the termination date).

Lease agreements (except for those relating to dwellings) entered into for a definite period of time, concluded by way of a notarial deed or a private deed registered with the competent tax authority, constitute enforceable titles once the term of the lease has expired, meaning that no court order is necessary for the eviction of the tenant. These rules also apply to lease agreements concluded for an indefinite period of time, but such lease agreements can be enforced in regard to eviction only when the period of time specified in the termination notice has passed. In addition, lease agreements concluded by way of private deed registered with the competent tax authorities or by way of notarial deed constitute a writ of execution against the tenant regarding its obligations to pay the rent in accordance with the relevant agreement.

Slovak Republic

Slovak Republic

If a tenant ignores a notice to vacate given by the landlord, the latter must apply for a court order. This may be a lengthy process. Under the Slovakian Civil Code, leases granted for indefinite periods of time can only be terminated by giving notice unless the parties provided otherwise in the original contract.

Under the Slovakian Civil Code, in the case of termination of an apartment lease, an apartment compensation must be provided to the tenant under specific conditions. When the lease agreed for a definite time terminates, the lessee shall not be entitled to replacement housing. However, a special Act may stipulate otherwise.

Spain

Spain

If a fixed-term lease has been agreed then notice of termination is not necessary. A termination notice is only required if the lease is for an unlimited term or the parties made other specific provisions requiring this.

The Spanish Civil Procedure Law establishes a procedure for obtaining the eviction of the premises if the tenant does not hand over the leased property to the landlord once the lease has expired. The landlord is entitled to file a claim to recover possession, once the claim is accepted for processing,  the tenant shall have ten days to respond in writing. Within five days after the answer to the claim, the Court Legal Secretary shall appoint the parties to a hearing which shall take place within a maximum term of one month from the appointment.

The legal proceedings term may vary from six months to one year until repossession of the leased property.

Sweden

Sweden

To ensure that a tenant leaves on the agreed date, the landlord must terminate the lease in due time in accordance with the contract, or the date stipulated by law, whichever is more favourable to the tenant (since tenants in Sweden benefit from a statutory minimum notice period). Landlords must also terminate the lease in accordance with a highly formal procedure. Therefore, to avoid the risk of legal action, it is important to seek legal advice before terminating a lease. If the tenant refuses to leave the premises, the landlord will have to seek an eviction order, either in court or through the enforcement service. It can take several months for the landlord to regain possession of the premises.

Thailand

Thailand

Contractual protections are generally used. The agreement should include a provision that provides that after expiration of a lease term or if the lessee is in breach of material terms of the lease contract, the lessor can enter into or occupy the relevant real estate. In the absence of such a provision, the lessor will bear the risk of being challenged and accused by the lessee of trespassing.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

Within Abu Dhabi and outside the Abu Dhabi Global Market free zone

The current position under Abu Dhabi law on lease renewals is not clear. Previously, the law stated that a landlord was prohibited from serving an eviction notice upon expiry of the lease term on a tenant and that, unless a tenant was ordered by the Lease Disputes Resolution Committee to leave the leased premises on the basis of one of seven grounds set out at law (See Early termination), a tenant had the right to remain in the leased premises and insist on a renewal lease (on the same terms as the existing lease but subject to a 5 percent increase in rent) at the end of the contractual term.

We understand from various reports that, with effect from 22 November 2013, the Abu Dhabi Executive Council disapplied this prohibition, however, no law amending the above position has yet been promulgated.

To terminate the lease at the end of the term, notice of non-renewal should be served by the lessor on the lessee (three months for commercial property and two months for residential property) prior to the end of the term.

Within the Abu Dhabi Global Market free zone

In the Abu Dhabi Global Market free zone, there is no security of tenure – meaning that a tenant does not have a statutory right to renew their lease at the end of the term. [There are no provisions in ADGM law regarding eviction.]

United Arab Emirates - Dubai

United Arab Emirates - Dubai

As there is no automatic renewal, the landlord does not, strictly speaking, need to do anything to ensure that the tenant leaves on the expiry date, except to notify the tenant that he/she does not consent to the tenant remaining in occupation after the expiry of the lease term. In addition, in practice, a well-managed property will have an owner who agrees the precise arrangements for vacating the property in advance with the tenant and makes the necessary arrangements for inventories etc.

UK - England and Wales UK - England and Wales

UK - England and Wales

This depends on whether or not the tenant has security of tenure.  If a tenant is actually occupying a property for business purposes then in most cases statute grants them security of tenure. If the tenant does have security of tenure, the lease will not end following the expiry of its contractual term and the tenant will be entitled to a new tenancy unless the landlord has reasonable grounds to oppose it. In this case compensation may be payable. It is very common in the current market for landlords to disapply these statutory rights of security of tenure, although a strict procedure must be followed before the lease starts which involves serving notice on the tenant and the tenant making a declaration that they agree to exclude these rights.

If the tenant does not have security of tenure (for example, because the procedure was followed to enable the parties to contract out of the statutory provisions conferring security of tenure) then the tenant must leave on or before the end of the contractual term specified in the lease.  No additional action is required from the landlord unless the tenant refuses to leave, in breach of the terms of its lease.

UK - Scotland

UK - Scotland

The landlord must serve a formal notice on the tenant to quit the premises on the expiry of the term. The requisite period and form of notice depends on the area of ground and period of lease; however for leases of subjects up to and including two acres, of more than one year, a notice to quit of at least 40 days must be given.

Ukraine

Ukraine

The lease agreement may provide various options to ensure that the lessee leaves on the day agreed by the parties. The most efficient way is to prescribe in the agreement a substantial deposit payment that is returned by the lessor when the lessee leaves. It is also widespread practice to provide for a fine to be payable by the lessee to the lessor if it fails to vacate the premises on the agreed date. In addition, the lease agreement may stipulate that the lessor is entitled to remove the lessee's property from the leased real estate and claim compensation for his expenses from the lessee (although in practice this is difficult to enforce). In addition, the lessor is obliged to ensure that the lessee's property is safely stored until the lessee collects it.

Illegal use of land upon expiry of the lease term, despite the lessor's objection, in certain cases (eg if the lessor incurred damages exceeding UAH 283,750), may be considered a crime.

United States

United States

Under the common law ‘holdover rule’, a tenant remaining in possession after lease expiration without the landlord’s agreement may be treated by the landlord either as a trespasser subject to eviction or as a tenant under a lease for a new term, typically for a month-to-month term. Most states have enacted legislation abolishing this rule – the terms of those statutes vary widely in how they govern the relationship between the landlord and the holdover tenant. Consequently, guidance with respect to the actions to be taken by a landlord to ensure timely vacation of the premises should be sought from a qualified local lawyer.  That said, a well-drafted lease will typically clearly state how a holdover situation will be handled; for example, it may give the landlord broad rights to immediately evict the holdover tenant while charging the holdover tenant a much higher rate of rent during the period of holdover.

Zimbabwe

Zimbabwe

There is normally a contractual provision inserted into the lease agreement that states that in the event that a lessee remains in occupation of the property beyond the tenure of the lease, the landlord would be entitled to claim an amount equivalent to the rent and other sums due in terms of lease agreement. The landlord shall be entitled to accept and recover such payments without prejudice to effect on his claim to the cancellation of the lease. The eviction process may then be instituted in order to lawfully evict the lessee from the property. Legal advice in this regard would need to be sought.