Here is an overview of the Landlord and Tenant Act 1954 Part II (Sections 23-28) (Act). The 1954 Act is a large piece of legislation affecting commercial leases in England and Wales. We always recommend tenants seek their own legal advice considering all notices will need to be served by a legal professional.
Key Terms:
- Security of tenure: A tenant is protected by the Act and has an automatic right to renew their lease at expiry, unless the landlord objects on certain grounds (see s.25 below)
- Inside/Outside the Act: Being ‘inside’ the Act means a lease is protected by the Act provisions and the tenant benefits from security of tenure.
- Contracting out: For a tenant to be ‘outside’ the Act they have to ‘contract out’, meaning that the provisions of s.24-28 do not apply. The tenant must sign a Statutory Declaration which means they understand the consequences of being Outisde the Act. The lease will also expressly state that it is contracted out.
Section 23
Section 23 states that to be protected by the Act, there has to be a business tenancy in place. There are six basic elements to this, including the premises must be used for a business and the tenant must occupy at least part of the premises.
Section 24
Tenancies protected by the Act do not expire unless the landlord or tenant terminates the lease by serving a notice in accordance with the Act. This is known as ‘holding over’.
Section 25
This is a notice served by a landlord to end a tenancy. A Section 25 notice can be served 6-12 months before the termination date. There are two types of Section 25 notice ‘hostile’ and ‘non hostile. Both notices bring the lease to an end on a specified date. A non-hostile notice will provide terms on which the landlord will agree to renew the lease. When the landlord issues a hostile Section 25 notice opposing the grant of a new tenancy, they have to state what grounds they object on (see s.30 of the Act for the 7 grounds).
Section 26
Tenants can serve a notice requesting a new tenancy 6 to12 months before the date they wish the new tenancy to commence. It must be in the prescribed form and include proposed terms. If the landlord objects to a new tenancy, they must serve a counter notice within 2 months.
Section 27
A notice otherwise known as a notice to quit: Served by a tenant where they intend to leave with 3 months’ notice after the lease expiry date.
Section 28
The landlord and tenant both agree to a lease renewal and terms are agreed in writing.
