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The Landlord and Tenant Act 1954 (the "Act") regulates the way in which business tenancies can be terminated and gives business tenants security of tenure. Major changes to the provisions of the Act came into force in 2004.
What is security of tenure?
Which tenancies are protected?
Broadly, there are three requirements:
The Act does not protect certain tenancies, including:
A court order is no longer required to exclude the security of tenure provisions of the Act. Instead, the landlord must serve a notice on the tenant in a prescribed form and the tenant must sign a declaration that he has received the notice and accepts the consequences of the agreement to contract out. If the notice is served within 14 days prior to the grant of the tenancy or any agreement to grant it, the tenant must make a statutory declaration before an independent solicitor.
The lease must contain reference to the exclusion agreement, the notice and the declaration.
Terminating a protected tenancy
A protected tenancy can only be terminated in one of the ways set out in the Act. The most usual ways are:
By the tenant
If the tenant vacates before the end of the contractual term, there is no tenancy to be continued under the Act and no notice is needed. However, simply vacating after the end of the contractual term will not bring the tenancy to an end.
Otherwise, to terminate a protected tenancy the tenant may serve a notice on the landlord:
If the tenant serves either of these two notices, he may not then request a new tenancy (see Requesting a new tenancy below).
By the landlord
The landlord can serve a statutory notice to terminate the tenancy. The notice must be served not less than six months, nor more than twelve months, before the date of termination specified in it, which can not be before the contractual term end date.
The landlord’s notice must state whether the landlord will oppose an application by the tenant for a new tenancy, and if so, on which ground(s) of opposition.
Requesting a new tenancy
Rather than wait for the landlord to serve a notice, the tenant can request a new tenancy, which may have tactical advantages for him. Not all tenants can request a new tenancy. A counter-notice is required from the landlord within two months if the landlord wants to oppose the tenant’s application. The counter-notice must state the ground(s) of opposition.
Grounds of opposition
The most frequently used grounds are:
If either of these grounds are successfully used by the landlord, compensation may be available for the tenant.
Other grounds include the tenant’s failure to repair the premises, the tenant’s persistent delay in paying rent, the tenant being in substantial breach of other obligations or that the landlord has offered alternative accommodation.
Either party can apply to the court within prescribed time limits to have the matter determined, either to terminate the tenancy or to apply for a new tenancy. It will usually be the tenant who applies to the court in order for a new tenancy to be granted, and he must do so to obtain a new tenancy even if the landlord does not oppose one.