Lease Termination and Security of Tenure under a Business Lease Flashcards
In what ways can leases be terminated at common law (when the tenant is not in breach of their covenants)? Give details of each method.
1) Effluxion of time
- Fixed term leases automatically end when the contractual term ends
- No notice required
2) Notice to quit
- Periodic tenancies can end by LL or T giving the appropriate period’s notice (one month notice for a monthly periodic tenancy)
- A yearly periodic tenancy can end by giving 6 months’ notice
- Notice must expire at the end of a completed month
- Notice for a monthly periodic tenancy given on 14th August would expire on 30th September
3) Surrender
- T yields the lease to LL who accepts the surrender – both sides must agree to it
- Lease merges with reversion and is extinguished
- Surrender must be by deed to be legal
4) Merger
- T acquires the immediate reversion to the lease (acquires the LL’s estate in land)
- Opposite of surrender
- Can also occur where 3rd party acquires the lease and reversion together (on assignment of lease and sale of freehold interest)
What does Part II of the Landlord and Tenant Act 1954 apply to?
Act applies to ‘any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes’
- Can be occupied personally or through an agent
- Business is widely defined and includes trades, profession or employment or activity by a body of persons (tennis club and hospital both suffice)
What types of business tenancy will not be protected by the LTA 1954?
1) Tenancies at will
2) Fixed terms not exceeding 6 months
- Granting a 6-month lease with an option to extend once 6 months have passed will be protected
3) Farm businesses, mining leases not included
4) Fixed term tenancies where parties contract out of the Act by following a statutory notice procedure
- LL gives T notice that they want to offer a lease without security of tenure
- T must then make a declaration agreeing (must be made in the form of statutory declaration before an independent solicitor if notice received less than 14 days before grant of lease)
What is the effect of a lease having ‘security of tenure’ under the LTA 1954?
Leases which enjoy statutory protections (security of tenure) can only be terminated in prescribed ways and T can renew or extend them
- The common law methods of termination might not apply
Tenancy will continue until terminated in accordance with the Act and then T can apply to court for a new tenancy which can only be opposed on one of 7 statutory grounds (s30 grounds; considered later)
What are the 7 methods of termination provided for in the LTA 1954?
1) by the service of a landlord’s notice under s 25
2) by the service of a tenant’s request for a new tenancy under s 26
3) forfeiture (T in default)
4) surrender (LL and T agree to end tenancy)
5) in the case of a periodic tenancy, by the tenant giving the landlord a notice to quit (LL cannot serve notice to quit on T)
6) in the case of a fixed-term lease, by the tenant serving three months’ written notice on the landlord under s 27, so long as the notice does not expire before the contractual expiry date (LL cannot serve notice on T)
7) in the case of a fixed-term lease, by the tenant ceasing to be in occupation for business purposes at the end of the lease under s 27(1A).
- Forfeiture and surrender are the most common and they are the only common law methods available to LL
- If no grounds for forfeiture and T won’t agree to surrender, L can only end business tenancy via s25 notice
