A missed notice of termination is one of the most expensive mistakes a company can make as a tenant. Commercial leases renew automatically, often for three years at a time, and the notice period is much longer than for homes. Here we explain which notice period applies to commercial premises, how to terminate a commercial lease correctly and how to give notice in order to renegotiate the terms.
Short answer: Unless otherwise agreed, a commercial lease running for more than nine months must be terminated no later than nine months before the end of the lease term. The notice must be in writing. If the lease is not terminated in time, it is extended. If you want to stay but change the terms, you give notice for a change of terms (uppsägning för villkorsändring).
Notice period for commercial premises
The notice periods are set out in Chapter 12, section 4 of the Land Code (jordabalken) and apply unless the parties have agreed on a longer period.
| Lease | Statutory notice period |
|---|---|
| Indefinite term (until further notice) | At the first turn of the month that comes after nine months from the notice |
| Fixed term, longer than nine months | No later than nine months before the end of the lease term |
| Fixed term, longer than three but at most nine months | No later than three months before the end of the lease term |
| Fixed term, longer than two weeks but at most three months | No later than one week in advance |
| Fixed term, at most two weeks | No later than one day in advance |
The last three rows only apply if the lease says it must be terminated. Otherwise, a fixed-term lease where the tenancy has lasted at most nine months simply ends when the term expires (section 3).
An example: the lease runs until 31 December 2027 and has a nine-month notice period. The notice must then have reached the landlord by 31 March 2027 at the latest.
The lease does not end by itself
A fixed-term lease where the tenancy has lasted longer than nine months must always be terminated in order to end. If nobody does so, the lease is extended. If the lease has no extension clause, it continues for an indefinite term, but almost all standard leases specify an extension period, often three years. A notice that arrives one day late can therefore bind you for another three years.
Put the last day for giving notice in the calendar with several months' margin, and start looking for a new office before then so you know what the alternatives cost.
How to terminate your lease
- Write the notice. It must be in writing if the tenancy has lasted longer than three months. State the lease, the premises and the date on which the lease is to end.
- Send it to the right recipient. The notice must be addressed to the landlord or to the person authorised to receive rent on the landlord's behalf.
- Make sure it arrives in time. Ask for a written acknowledgement that the notice has been received, or send it by registered post to the landlord's usual address. A registered letter counts as delivered when it is handed in for posting. Keep the proof.
- Check the signatory. The notice must be signed by someone authorised to sign for the company.
For landlords the formal requirements are stricter. A notice to a tenant with security of tenure cannot be sent by registered post but must be formally served, and it must have specific content to be valid.
Notice for a change of terms
If you want to stay but change the terms, usually the rent, you terminate the lease for a change of terms. This is the statutory way to renegotiate a commercial lease.
If you as the tenant give notice (section 58 a):
- State in the notice which changes you are asking for.
- If you cannot agree, you must refer the dispute to the Rent and Tenancy Tribunal (hyresnämnden) for mediation within two months of the notice. Otherwise the notice has no effect and the lease continues on the old terms.
- While mediation is ongoing, the landlord may neither refuse an extension nor demand worse terms than in the terminated lease, unless the landlord has also given notice. If the landlord does so anyway, you are always entitled to compensation.
If the landlord gives notice (section 58):
- The notice must state which terms the landlord demands for an extension, or why an extension is refused.
- It must inform you that you need to turn to the Rent and Tenancy Tribunal within two months if you do not want to move out without compensation.
- Without this information the notice has no effect.
If you do not accept the new terms and they are not reasonable, you may be entitled to compensation under the rules on security of tenure for commercial premises (besittningsskydd). The yardstick is the market rent, meaning what similar premises in the area are let for. We cover what offices cost in Stockholm right now in our review of office prices.
Can you leave the lease early?
A fixed-term lease generally cannot be terminated early. If you need to leave sooner, there are in practice three routes:
- Negotiate. The landlord may agree to release you from the lease, often in return for compensation or if a new tenant is ready.
- Sublet. Requires the landlord's consent. You remain liable for the rent.
- Assign the lease. Normally requires the landlord's consent. If you sell the business, the Rent and Tenancy Tribunal can in some cases permit the assignment.
The landlord can terminate the lease early if the tenancy has been forfeited, for example for unpaid rent.
Frequently asked questions
How long is the notice period for commercial premises?
Nine months for indefinite-term leases and for fixed-term leases longer than nine months, unless a longer period has been agreed.
Does the notice have to be in writing?
Yes, if the tenancy has lasted longer than three months.
What happens if we miss the deadline to give notice?
The lease is extended, either for an indefinite term or for the period stated in the lease, often three years.
What is notice for a change of terms?
The lease is terminated with the aim of extending it on new terms. The party giving notice must state which terms it is asking for, and the dispute must be referred to the Rent and Tenancy Tribunal within two months if the parties cannot agree.
Can the landlord raise the rent during the lease term?
Not beyond what the lease says, for example an index clause. A different rent requires the lease to be terminated for a change of terms at the end of the lease term.
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