Does the Landlord and Tenant Act 1954 apply?
Provided a tenancy satisfies the requirements of the Landlord and Tenant Act 1954 (LTA 1954), a tenant will have a statutory right to seek a new lease or tenancy at the expiry of its current tenancy, pursuant to the act, and the tenancy will continue in the meantime until terminated in accordance with LTA 1954.
Section 23 of LTA 1954 set outs the provision to satisfy for the 1954 Act to apply, a tenancy is within the Act if the whole or a part of the demised premises is occupied by the tenant for the purposes of its business. There are three essential conditions to be satisfied in order for the protection of LTA 1954 to apply
- There must be a periodic or fixed-term tenancy. Licences and tenancies at will do not confer statutory protection;
- The tenant must occupy at least a part of the premises;
- The occupation by the tenant must be wholly or partly for business purposes. If there is only partial occupation by the tenant, or only partial business use, the tenant can only insist on a new tenancy of the part which it occupies.
The term business has a wide definition under the Act, so careful consideration must be given when determining if the Act applies.
At the outset of taking out the lease, the Landlord and Tenant may agree to opt of the protection afforded by the act, in which case the Tenant will not have the statutory right to renew their lease.
Under the Act an LTA 1954 lease will continue until terminated in accordance with the provisions of the Act i.e. service of a landlord’s section 25 notice, tenant’s section 26 request, or tenant’s section 27 notice. Alternatively the lease can be bought to an end by other legal mechanisms such as forfeiture and surrender of the lease.
Section 25 notice
If a landlord wants to terminate the lease (and the tenant has not already served a section 26 request) they must serve a section 25 notice on the tenant. This must either confirm that the landlord does not oppose the grant of a new lease, or that it does, and if so specifying which ground(s) of opposition the landlord is relying on under LTA 1954, s 30.
The section 25 notice must be given in the prescribed form, or a form substantially to the same effect, and contain the required information in order to be valid.
Section 26 Request
If a tenant wants to terminate a tenancy and request a new one (and they have not already been served with a section 25 notice) they may serve a section 26 request on a landlord.
The tenant’s request must specify a date for the new tenancy to begin. Termination of the existing tenancy takes place immediately before the date specified in that notice.
The notices must provide no more than 12 month and no less than 6 months’ notice of the termination date of the tenancy. If by the end date of the tenancy an agreement has not been reached between the parties to a new lease, court proceedings must be issued to protect the lease.
Holly Minney, Head of Dispute Resolution, said:
“Unless the necessary steps have been taken for the Lease to be outside of the act, the provision of the 1954 will apply, therefore the correct processes need to be followed to end or renew the tenancy.”