Bringing a protected business tenancy to an end
Under the Act a protected business tenancy (ie: a tenancy covered by the Act) will continue (even after the end of the stated term granted by the lease) until it is brought to an end by a prescribed notice. In such circumstances the tenant is described as ‘holding over’.
It is in both the landlord’s and tenant’s interests to understand the process so that they can take the appropriate action.
Termination by a landlord
When a landlord wishes to bring the lease to an end the landlord must serve notice under section 25 of the Act (section 25 notice).
This notice cannot be served until the last year of the contractual term of the lease, nor can it be given after the tenant has served on the landlord a request for a new tenancy under section 26 of the Act (see below). In effect, it allows the landlord to start a procedure which will end, either in the tenant being granted a new lease, or in the tenant vacating.
A section 25 notice must specify the date on which the landlord proposes to bring the existing lease to an end, which cannot be earlier than:
- the end date of the lease; or
- six months from the date of giving the notice.
The notice must also:
- state whether the landlord will oppose any application by the tenant for a new lease, and if so, on which of the grounds laid down by the Act; and
- outline terms on which the landlord is prepared to grant the renewal lease including the length of term proposed and the rent which the landlord is seeking.
Termination by a tenant
When the tenant wishes to bring the lease to an end the tenant must serve on the landlord a notice under section 26 of the Act (section 26 request)
This is a notice requesting a new tenancy on termination of the old one. A section 26 request must specify a date on which the existing lease will end.
As in the case of the landlord’s section 25 notice the date of termination cannot be earlier than six months after the date of the section 26 request nor more than 12 months after that date.
A section 26 request cannot bring the existing lease to an end before its contractual expiry date, and must also set out the tenant’s outlined proposals for the terms of the new lease, covering the same points as outlined above for the section 25 notice.
When a tenant does not want to renew its lease
In the situation where a tenant does not wish to renew its lease and wishes to be sure that the lease is not continued automatically by application of the Act, the tenant has the right (under section 27 of the Act) to bring the tenancy to an end.
In these circumstances, a tenant needs to:
- give notice of its intention not to seek a lease renewal at least three months before the date on which the tenancy would otherwise expire; or
- if the tenant is holding over, the tenant may bring that continuing tenancy to an end by giving not less than three months’ notice in writing to the landlord.
Once a section 27 notice to end a tenancy has been served, a tenant will no longer have any right to remain in occupation following the expiry of the notice, and will also lose the security of tenure protection conferred by the Act.
To find out how a business tenant can get security of tenure under the Act or how a landlord can regain possession, see our article here.
To find out how to exclude the security of tenure provisions of the Act, see our article here.
The Landlord and Tenant Act 1954 is highly technical, imposing strict deadlines that if not met can have very serious consequences for one or both parties. Nothing in this article should be taken to constitute legal advice but should therefore be treated as a guide only. Legal advice should always be sought before entering into or terminating a business tenancy agreement, or for any other legal matter.