Business Tenant Protection – For whom? For what? How?

Security of tenure within UK, Swedish and Australian law

Abstract

Business tenants in many countries are seen to be in need of tenant protection with respect to unfair lease terms and other exploitations by landlords. Small business tenants are particularly vulnerable at the end of a lease term. Harsh and oppressive behaviour by unscrupulous landlords demanding excessive rent increases or substantial one-off fee payments as conditions for renewing business leases has historically forced many tenants to submit to landlord demands even at the risk of business failure. The purpose of providing tenants with statutory protection at the end of a lease term primarily is to balance the bargaining powers of the parties. Providing tenants with such protection reduces their risks for economic losses, affecting the balance of the parties’ bargaining powers throughout the entire lease term.
A comparative perspective is used here to explore the different legal approaches and solutions to business tenant protection at the end of a lease term as found in the United Kingdom (UK), Sweden and Australia. The complexity of regulating and balancing the parties’ interests, rights and responsibilities at the end of a lease term in the diverse business tenancy market is examined and analysed. Whether it is possible, feasible or even desirable to legislate tenant protection that fits all interests and purposes is a main theme in this work. A form of tenant protection is sought that at the same time is efficient and flexible. It must be efficient enough to provide protection for tenants, such as the small barber shop on the street corner, and also flexible enough to allow tenants to negotiate at arm’s length to create and formulate the lease that they want, for example, an international retail company holding a tenancy of large prime location premises.