The Landlord and Tenant Act 1954

The Landlord and Tenant Act 1954 (“the Act”) provides a business tenant with the right to remain in occupation of its rented premises after the lease term has come to an end. The expiry of the fixed term of the lease will not automatically end the tenancy. Furthermore, provided certain conditions are fulfilled, a business tenant is entitled to a new tenancy.

If a business tenant wants to remain in occupation, it can, if the lease qualifies for protection and the tenant complies with specific procedures under the Act.

Ending a tenancy under the Landlord and Tenant Act

There are several methods for ending a business tenancy that is protected by the Act.

If you are a landlord and you do not wish for the tenant to remain in occupation on the same terms as the current lease, but the Act applies to the lease, you will need to serve a notice under section 25 of the Act. This notice can be friendly or hostile. A friendly notice means you will not oppose the tenant’s application for a new tenancy. A hostile notice means you will oppose the tenant’s application for a new tenancy. A landlord can only oppose the grant of a new tenancy on one of the grounds set out in section 30(1) of the Act and the notice must contain the ground(s) relied upon for this opposition.  A tenant may be entitled to compensation if a landlord is successful in opposing a new tenancy.

The section 25 notice must comply with the Act and must give to the tenant not less than 6 months’ notice and not more than 12 months.

If you are not opposed to granting a new tenancy, the section 25 notice must state your proposals for the terms of the new lease including the proposed new rent, duration, and other terms.

Renewing a tenancy under the Landlord and Tenant Act

If you are a tenant, you may serve on the competent landlord a request for the grant of a new tenancy under section 26 of the Act.  The section 26 request must set out your proposals for the terms of the new lease.  The Act sets out the process for identifying the competent landlord.

Both a section 25 notice and a section 26 request must give a minimum of 6 months and a maximum of 12 months’ notice to bring the current tenancy to an end.  The termination date specified in the notice or request cannot pre-date the contractual expiry date.

Once a section 25 notice or section 26 request has been served, assuming the landlord is not opposing the grant of a new tenancy, the parties will usually enter negotiations to agree the terms of the new lease.  If negotiations fail, either party can make an application to the court asking the court to decide the terms on which the new lease is to be granted.  An application must be made before any termination date expires.  If a court application is not made in time the current tenancy will come to an end and the landlord will be entitled to ask the tenant to leave the premises.

If you are a tenant and you do not wish to renew your tenancy, provided certain conditions apply you may serve on your landlord a notice under section 27 of the Act giving 3 months’ notice.

Other methods for ending a business tenancy not covered by the Act may also apply.  For example, a landlord may forfeit the tenancy if the tenant has broken the terms of the lease, the parties may agree a surrender of the lease, or the tenant may decide to vacate the business premises at the end of the fixed term of the lease.

If you have any questions about the topics raised in this article, please get in touch.