Dispute Resolution
How Does Section 25 of the Landlord and Tenant Act 1954 Impact Landlords?
All commercial leases, unless expressly stated otherwise, will have the protection of the Landlord and Tenant Act 1954 (“LTA”).
Under the LTA, there are a number of notices that a landlord and tenant can serve in relation to a lease. In this article, we will look at the service of a section 25 notice.
A section 25 notice is the notice which the landlord would serve upon the tenant at the expiry of their lease. This notice can either propose a new tenancy or oppose the granting of a new tenancy. Where a section 25 notice is offering to renew a lease, the notice will set out the proposed new terms.
A section 25 notice is necessary where the landlord opposes a new tenancy (i.e. they want the tenant to leave). In this case, the notice will need to state on what grounds under section 30(1) of the LTA that the landlord is relying on. The landlord’s grounds of opposition must be honest and there must be a genuine basis for citing any particular ground. Landlords will need to keep in mind that some of the grounds will warrant them paying statutory compensation to the tenant.
On the notice, the landlord must select a date between 6-12 months for the lease to end but the date cannot be earlier than the contractual expiry date of the lease.
If the tenant opposes the landlord’s notice to end the lease, they will need to make an application to court, for the court to determine if the landlord’s reliance on the grounds is just. The parties have the option to agree that the time for making an application at court be extended i.e. extending the date of termination of the tenancy. But, if the tenant fails to make an application to court and proceedings have not been issued prior to expiry of the lease or the new extended date, the lease will end on the date in the notice and the tenant will lose their right to a new lease.
A section 25 notice should be served on the tenant in accordance with the provisions for notice in the lease. Whichever method is used to serve the notice, ideally the landlord should ensure that proof of receipt and service is obtained. The notice should accurately state the name and address of the landlord and tenant. If the landlord’s interest is held by two or more persons, all of them must give the notice.
Janeet Jawanda, Trainee Solicitor in our Dispute Resolution team, said:
“Mullis and Peake regularly advise landlords and tenants on the protections offered by the Landlord and Tenant Act 1954. The statutory period after service of a section 25 notice is useful for facilitating negotiations between parties and for avoiding court proceedings if an agreement is reached. Landlords and tenants need to be aware of the time limits under the LTA and how those time limits are calculated so that they do not lose the right to oppose to a notice. Contact our Romford office for more information on 01708 784000 for more information.”