Does a tenant have a right to continue to occupy the relevant real estate after the expiry of a commercial lease?
In principle, the lessee possesses the right to continue occupation of the premises after the expiry of the lease, provided that no ‘due reasons’ exist for the lessor to deny a renewal term for an ordinary lease. Where ‘due reasons’ exist for non-renewal, the lessor must provide the lessee with six months prior notice of non-renewal. When considering the existence and validity of any ‘due reasons’ for non-renewal, courts typically consider, including but not limited to, the following factors:
Where the lessee continues occupation of the premises after the expiry of the lease, the terms and conditions of the lease such as rent are the same as those under the original lease except that it is deemed a lease without a fixed term. In order for the lessee to terminate the lease, three months’ prior notice to the lessor is required. In order for the lessor to terminate the lease, six months’ prior notice to the lessee and ‘due reasons’ are required.
In the case of a fixed-term lease, the lessee does not possess the right to continue occupation of the premises after the expiry of the lease without the lessor's consent. The lessor is required (i) to explain in writing to the lessee the nature of the fixed-term lease prior to the commencement of the lease and (ii) to send non-renewal notice to the lessee six to twelve months prior to the expiry date of the lease term.