Landlord’s notices

Question 1

What must a section 25 notice state?

Answer 1

The section 25 notice states when the current tenancy will end (the date of termination).

The date of termination must be on or after the date on which the contractual term ends.

Question 2

When must a section 25 notice be served?

Answer 2

No less than 6 months and no more than 12 months before the date of termination.

Question 3

What are the two types of section 25 notices?

Answer 3

A friendly and hostile notice

Question 4

What is a `friendly’ notice?

Answer 4

This indicates that the landlord is willing to renew the lease to start the day after the date of termination.

Question 5

What is a `hostile’ notice?

Answer 5

Indicates that the landlord intends to oppose renewal of the lease. The landlord can only do this on certain statutory grounds, and must specify on which grounds or grounds the landlord intends to rely.

Question 6

What grounds can the landlord rely on to oppose renewal of the tenant’s lease?

Answer 6

• Persistent and serious breach by the tenant of a repairing obligation
• Persistent delay by the tenant in paying rent
• Serious and persistent other breaches of covenants by the tenant
• The landlord offers suitable alternative accommodation
• The landlord intends to demolish or reconstruct the premises or carry on substantial construction work which require possession
• The landlord intends to occupy the premises for itself

Question 7

What does it mean that the landlord must be able to substantiate the ground on which it is relying?

Answer 7

For example, if the landlord intends to redevelop the premises, it may show that it has obtained planning permission or entered into a construction contract.

Question 8

What are mandatory and discretionary grounds?

Answer 8

Mandatory grounds means that if the landlord established the ground, the court must grant possession to the landlord.

Discretionary ground means that even if the landlord shows the ground, it is down to the court’s discretion.

Question 9

What are compensatory and non-compensatory grounds?

Answer 9

Compensatory ground – if the ground relies on no fault of the tenant, then the tenant may be entitled to compensation.

Non-compensatory ground – if the ground relies on the tenant’s fault (breach of covenant), then the tenant is not entitled to compensation.

Question 10

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for breach of tenant repairing obligation

Answer 10

The evidence required is evidence of a serious breach.

This is a discretionary ground and not compensatory

Question 11

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for persistent delay in paying rent

Answer 11

The evidence required is the length of delay and number of times.

It is discretionary and non-compensatory.

Question 12

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for other substantial breaches of tenant obligations

Answer 12

Evidence required is evidence of serious and persistent breaches.

It is discretionary and non-compensatory.

Question 13

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for availability of suitable alternative accommodation

Answer 13

Evidence required is that the landlord must have made an offer of suitable alternative accommodation (with regard to the tenant’s business and goodwill) to the tenant.

This is a mandatory ground and non-compensatory.

Question 14

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for intention to demolish or reconstruct premises or carry out substantial repairs

Answer 14

The evidence required is a firm and settled intention to redevelop, possibly planning permission or construction contract.

This is mandatory and compensatory

Question 15

Explain the evidence required, mandatory/non-mandatory and compensatory/non-compensatory for landlord intends to occupy premises

Answer 15

Evidence required is a firm and settled intention by landlord, has owned reversion at least 5 years before the date of termination.

It is mandatory and compensatory.

Question 16

How is compensation calculated?

Answer 16

1 x the rateable value if the business has occupied the premises for less than 14 years

2 x the rateable value if the business has occupied the premises for 14 years or more.

Question 17

What is the rateable value?

Answer 17

Rateable value is based on estimated annual rental value of premises, and is fixed by the local authority for the purpose of calculating business rates due for the premises. It is not necessarily the same as market rent.

Question 18

What needs to be considered when calculating the qualifying time period?

Answer 18

The current tenant can include time that the business was carried on by a previous tenant provided that the current tenant has taken over the same business. This will likely require a transfer of goodwill, and it is not enough that the current tenant simply carries on the same kind of business as the previous tenant.

Question 19

Can you contract out of paying compensation?

Answer 19

It is only possible for the parties to a protected lease to contract out of paying compensation if the tenant has been in occupation less than 5 years.