Jennifer Slade

 Security of tenure for business leases – Landlord and Tenant Act 1954  Amended by 2003 Order (effective )  Handout:  Which tenancies? (p1)  Continuation (p4)  Methods of termination (p5)  Interim rent (p7)  Grounds of opposition (p7)  Tenant’s compensation (p14)  Renewal lease (p15)  Contracting out (p16)

 Two layers of protection for tenants (s24(1)) (p.1):  Continuation  Right to renew  Also compensation

Grant Contractual Expiry Date …………………………. “Continuation tenancy” “Holding over” Renewal tenancy

 Which tenancies (p.1)?  Section 23 ▪ Tenancy ▪ Occupation ▪ Business

 Tenancy  Not licence or tenancy at will  Occupation  ss23(1A)/(1B) – occupation through a company – good for small companies  s42 – group companies (see p.3)  Business  Fact and degree  Examples (p.3)

 Tenancies expressly excluded from protection (p.4):  s43 ▪ Agricultural ▪ Mining ▪ Service tenancies ▪ Six month leases (note provisos)  s38A ▪ Contracted out leases (see later)

 Section 24  Continue on same terms until terminated in accordance with the Act  Termination  Forfeiture  Surrender  Notice to quit  s25 notice (L)  s26 notice (T)  s27 notice (T)

 Section 25 notice (p.5)  L. serves on T. – prescribed form(s)  Rationale - hostile vs non-hostile ▪ Hostile – L’s grounds of opposition to new lease ▪ Non-hostile – (non-binding) proposals for new lease  Procedure  Serve ▪ Not more than 12 months ▪ Not less 6 months Before the termination date specified in the notice (use corresponding date rule) IT IS NOT POSSIBLE TO TERMINATE PRIOR TO THE CONTRACTUAL EXPIRY DATE OF THE LEASE

CED = 29 August When is the earliest that L can serve s25 notice?

CED = 29 August When is the earliest that L can serve s25 notice? 12 months Serve notice on 29 August 2007

CED = 29 August When is the earliest that L can terminate the lease? (today is 11 March 2008)

CED = 29 August When is the earliest that L can terminate the lease? (today is 11 March 2008) Serve on 11 March 2008

CED = 29 August When is the earliest that L can terminate the lease? (today is 11 March 2008) Serve on 11 March 2008 Expiry date 11 September months

 Section 25 procedure:  L or T can apply to court for a new tenancy after service  T must apply to preserve its rights of renewal under the Act  L can apply for termination if hostile s25  s29A – application to court can be made up to the expiry date in the notice (parties can agree to extend the time limit)  No need now for T’s counternotice (2003 Order)

 Section 26 notice/request:  Rationale for T to terminate and renew?  see p5  Procedure:  T has 12 – 6 month service window (i.e. for date specified in notice) ▪ L can agree to terms OR refuse to renew (cite grounds) OR agree to renew but on different terms  Note: if opposing renewal, L must serve counternotice to oppose renewal within 2 months of service  Court applications – before date in notice (after 2 month period for counternotice has elapsed)

 Competent landlord (p.6):  Notices served between tenant and competent landlord – not always immediate landlord  No problem if letting of freehold  For sublettings, identify next landlord in the “chain” whose tenancy will not expire within 14 months  See manual – pp 264

L (freeholder) T Sub-T Ask – Will T’s lease come to an end within 14 months? Did T sublet the whole of the premises (so out of occupation, so not protected)?

 Section 27 notice  Served by T on L in order to terminate lease without renewal  s27(1) ▪ Serve at least 3 months before contractual expiry date to determine on that date (cannot terminate before) ▪ Esselte v Pearl Assurance incorporated into Act by 2003 Order – if T vacates on/prior to expiry date, lease no longer protected by the Act so no need for s27(1) notice

 Section 27(2)  3 month notice must be served if to terminate during the continuation tenancy

 Section 64  Continuation tenancy at old rent until 3 months after proceedings concluded  Section 24A  L or T can apply for “interim rent” (p.7)  Section 24B  Payable from earliest date that could have been specified in s25/s26 notice  Sections 24C/D - valuation

 Landlord’s grounds set out in s30(1)  Ground (a) – breach of repairing obligation  Ground (b) – persistent delay in paying rent

 Ground (c) – substantial breaches  Ground (d) – suitable alternative accommodation  Ground (e) – possession required for disposal of property as a whole

 Ground (f) and (g) – popular grounds  Ground (f) – L’s intention to demolish/re- construct/do substantial works  Firm and settled intention ▪ Evidence  Nature of works ▪ Demolish, reconstruct, substantial  L needing possession ▪ s31A - T’s “defence”

 Ground (g) – L’s intention to occupy  L’s intention  s30(2) ▪ 5 year rule  “Near miss” cases – s31(2)  Discretionary vs mandatory grounds:  Discretionary – (a), (b), (c), (e)  Mandatory – (d), (f), (g)

 Compensation grounds  (e), (f) and (g) – “no fault”  Amount of compensation:  Multiple of RV for holding  Multiple = 1 … unless continuous occupation for 14 years, then  Multiple = 2  Excluding compensation – s38(2)  5 years occupation

 Usually parties agree – else court intervenes  Terms  Premises  Term  Rent (s34 disregards)  Other terms  O’May principles  Wallis Fashions ▪ AGA in renewal lease?

 Old regime (pre /2003 Order):  Court order required  New regime (3 elements):  L to serve “health warning” notice on T  T to make declaration confirming receipt  Note – T’s declaration:  If completion 14 days after L’s notice ▪ T makes simple declaration  If completion within 14 days of L’s notice ▪ T makes statutory declaration

 Also, the lease must include a clause referring to:  The agreement to exclude Act for that tenancy  The notice (+ date)  The declaration (+ date + whether simple/statutory)  See precedent  Keep documents together!

 Agreements for lease  No longer can be conditional on contracting out  Notice/declaration procedure prior to agreement  No strict need for clause in agreement (but should for best practice)