The Landlord and Tenant Act 1954
Sections 24-28 of the 1954 Act provide statutory rights to tenants of business leases to be automatically granted a renewed lease of the premises when it expires. This is known as ‘Security of Tenure’ and means that the tenant does not need to vacate the premises and they will therefore not be trespassing by law for continuing to stay after their original tenancy has expired.
Exclusion of the 1954 Act
The rights in the 1954 Act granted to commercial or business tenants can be excluded by agreement between the parties prior to the grant of the lease. If the rights are to be legally excluded, the parties must follow a strict procedure specified by the 1954 Act prior to the grant of the lease; whereby the landlord serves a formal notice on the proposed tenant and, in turn, the tenant signs a declaration that it is willing to give up its rights. This agreement must then be recorded expressly in the lease.
Our barristers at Mercantile Barristers are experienced in advising SME and individual landlords and tenants draft and review the appropriate notices pursuant to the 1954 Act so that our clients are well aware of their legal obligations prior to granting or entering into a business lease.
Purchasing Business Leases
Prospective purchasers of commercial or business lease should always seek legal advice beforehand as it may have an adverse effect on the value and potential future uses of that building. For example, sitting tenants with rights under the 1954 Act may hinder the ability and/or cost of obtaining vacant possession of the building for redevelopment.
Accordingly, it is necessary for prospective purchasers to seek appropriate legal advice to ensure that they are adequately prepared when entering into these transactions. At Mercantile Barristers our legal advisers are adept at advising landlords and tenants on their legal obligations once a business tenancy is bought or sold.
Extending or Opposing a Business Leases
When a business lease ends, renewal terms can be agreed upon through informal negotiation with the landlord. However, if terms cannot be agreed and the lease has Security of Tenure, either party can serve notice on the other.
At the appropriate time, the landlord may serve a Section 25 notice on the tenant, ending the current lease. Where the landlord is willing to renew the lease, the notice will set out the new terms of the new lease, but the tenant does not have to accept these terms.
Alternatively, the tenant can serve a Section 26 notice on the landlord, requesting a new lease setting out the tenant’s new terms. There are certain specified grounds a landlord is entitled to oppose lease renewal and may have to compensate the tenant if they vacate
Legal Advice and Representation on Business Lease Renewals under the 1954 Act
Landlords and tenants may disagree whether a business lease should continue, and without reasoned negotiation, these disputes are left for the court to determine the way forward, giving rise to potentially significant uncertainty, costs and delay.
It can also take a considerable amount of time for the court to resolve disputes arising from the 1954 Act the issue. Our barristers at Mercantile Barristers have experience in acting for landlords and tenants in relation to business lease renewal applications under the Landlord and Tenant Act 1954.
Contact our Property Litigation Team today by filling in our Enquiry Form; emailing us at enquiries@mercantilebarristers.com; or by telephone on 0203 034 0077 and we would be happy to assist.
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Our clerk will agree the fee for your consultation with the barrister beforehand. The clerk will then arrange a convenient time for you to have the consultation by video call, telephone or in person.
In the consultation the barrister will assess your legal position, devise a legal strategy, and give you appropriate advice on the necessary next steps to achieve your objective.
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