Lease termination and security of tenure under a business lease Flashcards
Termination of leases at common law - Effluxion of time
With a fixed-term lease when the contractual terms ends the lease automatically determines by what is known as effluxion of time
Termination of leases at common law - Notice to quit
Periodic tenancies are determine by the appropriate period’s notice to quit given by the landlord or tenant. A yearly tenancy is determine by at least a half year’s notice. Other periodic tenancies are determined by one full period’s notice e.g one moth
Termination of leases at common law - Surrender
Occurs where the tenant yields up the lease to the landlord who accepts the surrender. It can only be achieved if both the landlord and tenant agree to it. On surrender the lease is said to merge in the landlord’s reversion and is extinguished
Termination of leases at common law - Merger
Occurs where the tenant acquires the immediate reversion to the lease.
1954 act - Purpose
If a tenancy comes within the requirements of the act the common law methods of termination may not apply. Basically allows the tenant to stay in the property
1954 act - Requirements
There must be a tenancy of a property which is occupied by the tenant for business purposes. Business = trade, profession or employment and in the case of a body of persons any activity carried on by them.
1954 act - Which business tenancies are not protected by the act (in favour of landlord)
1) Tenancies at will
2) Fixed term tenancies not exceeding 6 months
3) Tenancies of agricultural holdings, farm business tenancies and mining leases
4) Fixed term tenancies that are contracted out of the act - these can include a break right
1954 act - If the lease falls under, how do you terminate?
If the lease is protected then the tenancy will continue until terminated in accordance with the act and even then the tenant has a right to apply to court for a new tenancy which can only be opposed by the landlord. 7 methods of termination:
1) By service of a landlord’s notice under S. 25
2) By service of a tenant’s request for a new tenancy under S. 26
3) Forfeiture
4) Surrender
5) Regarding periodic tenancies - by giving the landlord a notice to quit
6) Regarding fixed term leases - by serving 3 months’ written notice on the landlord
7) Regarding fixed term leases - the tenant ceasing to be in occupation for business purposes at end of lease
If there are no grounds for forfeiture and the tenant will not agree to surrender the only way a landlord can terminate a business tenancy protected by the act is under S. 25
1954 act - Termination by the landlord - S. 25 notice
The landlord must serve a S. 25 notice on the tenant which makes clear whether the landlord opposes the grant of a new tenancy or not. Must state the date upon which the landlord wants the tenancy to end which cannot be earlier than the date the tenancy could have been terminated under the common law. Must be served no less than 6 months and no more than 12 months before the termination date specified in the notice.
1954 act - Termination by the landlord - S. 25 notice - if they oppose the new lease
If the landlord opposes the renewal of the tenancy the S. 25 notice must state the S. 30 grounds.
1954 act - Termination by the landlord - S. 25 notice - If the landlord does not oppose the new lease
The landlord is ending the current lease so that a new tenancy can be granted on different terms usually a higher rent - the landlord must indicate its proposals as to the terms of the new lease in s. 25 notice
1954 act - Termination by the landlord - S. 25 notice - Application to the court following service of a S. 25 notice - If the landlord objects
If the landlord indicates that they will oppose the grant of a new tenancy the tenant must apply to the court before the expiry of the S. 25 notice or they will lose their rights under the act. The landlord can pre-empt the tenant’s application to court by applying for an order to terminate the lease on the grounds stated in its S. 25 notice
1954 act - Termination by the landlord - S. 25 notice - Application to the court following service of a S. 25 notice - If the landlord doesn’t object
If the landlord indicates that it will not oppose the grant of a new tenancy the parties will enter into negotiations for the grant of a new lease but the tenants should still apply to court within the time limit to safeguard their position.
1954 act - Termination by the landlord - Landlord grounds of opposition S. 30
1) Tenant’s failure to repair - discretionary
2) Tenant’s persistent delay in paying rent - discretionary
3) Tenants’t substantial breach of other obligations - discretionary
4) Landlord has offered alternative accommodation - mandatory
5) Tenancy is an underletting of part - discretionary
6) Landlord intends to demolish or reconstruct and could not reasonably do so without obtaining possession - mandatory
7) Landlord intends to occupy the holding for its own business or as a residence cannot be used unless they have owned their interest for at least 5 years - mandatory
1954 act - Renewal lease by the tenant - S. 26 request
If the tenant wishes to remain in the property after the contractual expiry date they could take the initiative and serve a S. 26 request. This serves to bring the current tenancy to an end and constitutes a request for a new tenancy. Must state the date on which the tenant wants the new tenancy to begin and the request must contain the tenant’s proposals for the new tenancy. Time limits are the same for s. 25 - must give the landlord between 6-12 months notice
