What Rights Do Commercial Tenants Have Without a Lease in the UK?

Many small businesses occupy commercial premises without ever signing a written lease. Perhaps you moved in quickly, agreed terms verbally, or began paying rent informally while waiting for the landlord to “send something over.” Months (or years) later, you may suddenly wonder: What rights do I actually have if there’s no formal lease? Can the landlord remove me without notice? Do I have any legal protection at all?

The good news is that commercial tenants do have rights, even without a written lease. But the exact protection you have depends entirely on how the law classifies your occupation. This article explains the key categories, what they mean for your rights, and the steps your business should take to stay protected.

Can You Occupy Commercial Premises Without a Written Lease?

Yes. English law does not require commercial leases to be in writing. A valid tenancy can arise from:

• a verbal agreement
  
• email exchanges
  
• paying rent and being allowed to occupy
  
• the conduct of both parties over time
  

However, not every occupier becomes a “tenant”. The law looks at what actually happens in practice, not what the arrangement is called.

Broadly, an occupier without a written lease will fall into one of these categories:

1. Implied periodic tenancy
   
2. Licence to occupy
   
3. Tenancy at will
   
4. (less commonly) Equitable lease
   

Each carries very different rights.

1. Implied Periodic Tenancy

This is the strongest form of protection you can have without a written lease.

A periodic tenancy usually arises where:

• rent is paid regularly (e.g., monthly or quarterly)
  
• the occupier has exclusive possession (control of the premises)
  
• both parties intend the occupation to be ongoing rather than temporary
  

Exclusive possession is the most important point. If you can exclude others (including the landlord, except for lawful access), that strongly suggests a tenancy, not a licence.

Rights under a periodic tenancy

If you have a periodic tenancy, you may have:

• the right to proper notice before eviction (usually one full rental period)
  
• the right to quiet enjoyment, meaning the landlord cannot interfere with your use
  
• potential security of tenure under the Landlord and Tenant Act 1954 (unless contracted out)
  
• the right to apply for renewal of the tenancy
  

1954 Act protection

This law gives qualifying commercial tenants:

• the right to renew the tenancy
  
• restrictions on how and when a landlord can evict you
  
• compensation if renewal is refused on certain grounds
  

If nothing was signed to “contract out” of the Act, and you meet the criteria for a tenancy, you may have these rights - even if the arrangement began informally.

Example

A café moves into a shop unit and pays monthly rent for a year while waiting for a formal lease that never arrives. The landlord never tries to move them, and they control the whole space.
This is very likely an implied monthly periodic tenancy.

2. Licence to Occupy

A licence gives permission to use space but does not create a tenancy.

Characteristics:

• no exclusive possession
  
• the landlord can control access or move you to another area
  
• shared or flexible use
  
• short-term and less formal
  

A licence holder has significantly fewer rights than a tenant.

Rights under a licence

• only “reasonable” notice is required to end it
  
• no 1954 Act protection
  
• no automatic right to renew
  
• limited legal security against eviction
  

Licences are common in co-working spaces, shared commercial units and short-term hospitality arrangements.

Example

A creative studio pays for a desk in a shared workspace. They cannot exclude others and can be moved to another floor.
This is almost certainly a licence, not a tenancy.

3. Tenant at Will

A tenancy at will happens when a landlord allows you to occupy purely temporarily, often while negotiating a lease. It ends whenever either party chooses, with very little notice.

Common in situations where:

• a lease has expired and renewal is in progress
  
• both parties want flexibility
  
• rent is being accepted but only as a stopgap
  

Rights under a tenancy at will

• occupation can be ended at any time
  
• no 1954 Act protection
  
• no security of tenure
  
• no fixed notice period (though a court may require reasonable notice)
  

A tenancy at will is the least secure arrangement.

Example

A business’s fixed-term lease expires, and both sides agree they’ll “sort out a renewal soon,” but no new lease is signed. Rent is paid monthly but on a temporary understanding.
This often creates a tenancy at will, not a periodic tenancy.

4. Equitable Lease (Less Common)

If the essential terms of a lease were agreed (premises, rent, length) but the document was never formally completed, the occupier may have an equitable lease.

This is rare but can provide additional rights - including potential 1954 Act protection.

Can a Landlord Evict a Commercial Occupier Without a Lease?

It depends on the occupier’s legal status.

If you have a periodic tenancy

The landlord must give proper notice tied to the rental period (e.g., one month for monthly rent). If the tenancy is protected by the 1954 Act, they must follow formal statutory procedures.

If you have a licence

The landlord can end it on reasonable notice, which may be short depending on the circumstances.

If you are a tenant at will

The landlord can usually end the arrangement immediately or with minimal notice.

What the landlord cannot do

Even without a written lease, landlords cannot:

• forcibly remove you
  
• change locks without due process
  
• harass you or interfere with your operations
  
• remove goods or equipment without lawful authority
  

Doing so may constitute unlawful eviction or breach of quiet enjoyment.

Rent, Repairs and Other Obligations

Even without a written lease:

• you must pay rent if that was agreed
  
• the landlord must allow you “quiet enjoyment”
  
• repair responsibilities depend on the agreement and the history of dealings
  
• service charges may only be payable if agreed or clearly understood by the parties
  

Without a proper lease, disputes are more common - especially regarding repairs and dilapidations.

Do You Have Security of Tenure Without a Lease?

Possibly.

If your arrangement amounts to a protected periodic tenancy, you may have statutory rights under the Landlord and Tenant Act 1954, including:

• the right to remain in occupation after the landlord serves notice
  
• the right to ask the court for a new lease
  
• compensation if the landlord refuses renewal for certain reasons
  

This can be a major advantage for tenants who started informally.

How Do You Know Which Category Applies to You?

Courts examine:

• exclusive possession
  
• rent payment and frequency
  
• the intended nature of the arrangement
  
• the behaviour of both sides
  
• whether negotiations for a formal lease were ongoing
  
• whether the landlord exercised control over the space
  

The label (“licence”, “tenancy”, “temporary occupation”) does not determine the legal position.
Reality does.

Practical Steps for Commercial Tenants Without a Lease

If you're in occupation without a formal agreement:

Clarify your position

Work out whether you’re a licensee, periodic tenant, tenant at will or equitable tenant. You may have more rights than you think.

Gather evidence

Keep emails, rent statements, texts and notes of verbal agreements.

Understand rent and notice periods

Periodic tenancy = notice must match rental periods.
Licence or tenant at will = only reasonable or very short notice.

Consider requesting a formal lease

This reduces uncertainty and avoids disputes about repairs, service charges, rent reviews and renewal rights.

Seek legal advice before committing

A commercial lease heavily favours one party if not

negotiated properly. Even simple clauses can impose significant obligations on tenants. Being proactive is important – having a clearly drafted commercial lease in place gives both sides certainty and ensures you’re not relying on assumptions or informal arrangements that could leave your business exposed. A well-prepared lease sets out responsibilities, reduces misunderstandings and provides genuine peace of mind.

Key Takeaways

• UK commercial tenants can have enforceable rights even without a written lease.
• An implied periodic tenancy gives the strongest protection and may carry full 1954 Act rights.
• A licence or tenancy at will offers far weaker protection and can often be ended quickly.
• Landlords cannot evict occupiers unlawfully, even if nothing is written down.
• Understanding your true legal status is essential for protecting your business.
• If you're unsure, getting early legal advice can prevent costly disputes later.

If you'd like help confirming your rights or putting a proper lease in place, our team can guide you through your options and ensure your commercial occupation is legally secure. You can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.