Security in a Renting Contract
The Landlord and Tenant Act 1954, Part II provides statutory protection for tenants who use a building for the intention of a business. This Act is significant in giving security for business tenants who may lose business and goodwill if they were forced to leave their tenancy at the end of their lease term. The Act was brought about at a time when the economy was in turmoil This was done as it was believed that by providing security of tenure to business tenants it would promote investments and the economy to get back on track.
It gives safety for business tenants by enabling them to apply to the court for a renewal of the tenancy and therefore for the tenancy to automatically be allowed to continue after the contractual term. Thus allowing the lease to continue on the same basis and at the same rent until it is brought to an end by the methods set out in the Act.
By a section 25 notice (under the 1954 Act) is the more prevalent means of termination by a landlord. There are strict deadlines for serving notices under section 25, and a minimum of 6 months notice must be provided but no more than 12 months prior to the date the landlord wishes the lease to terminate. however, the landlord cannot terminate the lease before the contractual termination date.
There are limitations for a landlord in disregarding a tenants application for a new tenancy. As follows are the statutory grounds:
(a) tenant’s failure to carry out repairing obligations;
(b) tenant’s persistent delay in paying rent;
(c) tenant’s substantial breaches of other obligations;
(d) suitable alternative accommodation is available for the tenant;
(e) in cases of a sub tenancy of part, possession is required for letting or disposing of the property as a whole;
(f) the landlord intends to demolish or reconstruct the premises;
(g) the landlord intends to occupy the premises himself.
It is up to the landlord to prove the reasons on which they are relying on. If the landlord was to successfully oppose a new tenancy under grounds (e), (f) or (g) the tenant would be entitled to compensation in most circumstances.
Some tenancies are not a part of the 1954 Act, i.e. a tenancy at will, contracted out tenancies and fixed term tenancies not exceeding 6 months. You must seek professional advice on whether or not you are protected by the 1954 Act and what you must do if you are served with a section 25 notice.
This article is meant to be only for general information purposes and is not meant to be relied upon by any party in any circumstance.