The Landlord and Tenant Act 1954 (“LTA 1954”) provides commercial tenants with security of tenure and a right to seek a renewal lease.
If the Lease is subject to the protections of the LTA 1954, then the Landlord or the Tenant can initiate the lease renewal process. A Landlord can initial the renewal process by serving a section 25 notice on the Tenant, and a Tenant can initial the renewal process by serving a section 26 notice on the Landlord.
If the Landlord opposes the renewal of the Tenant’s lease, then they must rely on one of the following grounds:
- The premises are in disrepair
- There are rent arrears
- The Landlord has offered and is willing to provide alternative accommodation
- On the termination of the current tenancy, the Landlord intends to demolish the premises and requires possession of the building
- On the termination of the current tenancy, the Landlord intends to take possession of the premises to carry on a business or to use it for residential purposes
- Other breaches of covenant
- The tenancy was created by a sub-letting.
The Landlord can specify one or more grounds of opposition. Once a ground of opposition has been specified by the Landlord, it cannot be changed for an alternative ground and further grounds of opposition cannot be raised at a later date.
The Courts will get involved if the Landlord and Tenant cannot agree terms of a renewal lease, or if the Landlord objects to a renewal lease by relying on one of the grounds set out above.
Strict time limits apply to applications to Court. Applications must be made by the end of the ‘statutory period’, which ends on either of the following dates:-
- The termination date specified in the Landlord’s section 25 notice; or
- The day before the commencement date specified in the Tenant’s section 26 notice.
It is possible for Landlords to exclude the provisions of the LTA 1954 from a commercial lease, but the correct procedure must be followed. This involves the Landlord serving Notice on the Tenant to confirm that the lease is to be excluded from the protections of the LTA 1954. The Tenant must then make a Statutory Declaration to confirm that it accepts and understands that the lease will be excluded from the security of tenure provisions.
For advice relating to commercial leases and disputes arising as a result of the Landlord and Tenant Act 1954 please contact Farleys Solicitors. Our experienced team can advise you on the steps to take to resolve your dispute. Please call 0845 287 0939 or send your enquiry through our online contact form.