Property Practice VIII Security of Commercial Tenancy

Question 1

Statutory methods of terminating a commercial lase:

4

Answer 1

A tenancy protected by the Landlord and Tenant (Part II) Act 1954 will automatically continue at the end of the contractual term, unless it is brought to an end in one of the following ways:

Forfeiture by the landlord
Surrender (both parties agree to give up the lease)
The landlord serves a valid section 25 Notice on the tenant to terminate the lease or suggest a new lease;
The tenant serves a ‘Section 26 notice’ on the landlord to request a new lease

Question 2

Exclusion from the 1954 Act

3

Answer 2

the 1954 act does not apply to certain tenancies, including fixed-term tenancies not exceeding six months, service tenancies and contracted out tenancies

Question 3

Explain contracted out tenancies

Answer 3

tenancies where the security of tenure provisions from the tenancy are excluded

to contracted out, the landlord and tenancy must have the landlord’s health warning, the tenant’s declaration and a reference in the lease to the requirements

Question 4

Explain Landlord’s Health Warning

Answer 4

Before the tenancy starts the landlord must serve on the potential tenant a health warning notice.

The notice explains what the security of the tenure is, that the potential tenant will be giving up these rights under the lease, the consequences and that they should seek professional advice.

The landlord should serve 14 days before the lease or if opt for fewer days the tenant must sign a formal statutory declaration in front of an independent solicitor confirming waiver of a 14 days notice

Question 5

Explain Tenant’s declaration

Answer 5

the declaration will state that they have received the health warning and further they agree to contract out of the Act and its consequences. No solicitor presence is required.

Question 6

Explain Reference in the lease

Answer 6

To contract out of 1954, there must be a clause in the lease that refers to the health warning and the tenant’s declaration.

Question 7

Explain s25 notice

BRAVADO

Answer 7

s 25 notice can be a notice to a new lease or terminate.

it must be served 6 - 12 months before the end of the current tenancy. it must satisfy one of the following ground:

• a substantial breach of obligations
• Tenant failure to carry out repairs obligations
• the availability of suitable alternative accommodation for the tenant
• The landlord requires the whole property for subsequent letting (VACANT)
• The landlord intends to demolish or reconstruct the premises and cannot do so with the tenant in occupation(APART)
• persistent delay in paying rent
• The landlord intends to occupy the holding

Question 8

Explain s26 notice

Answer 8

Request by the tenant for a new lease. It must be served on the tenant’s competent landlord or agent and request that the landlord grant a new lease.

must be served 6 - 12 months before the new tenancy to start

on service landlord has two months to inform the tenant that they intend to oppose to the request. the ground to oppose must conform with s 25.

Question 9

Mandatory and discretionary grounds under section 25 notice

Answer 9

No-fault grounds are mandatory ground (vacant, wishes to occupy or demolish) where the court must refuse to order a new tenancy

Tenancy fault grounds are discretionary, the court may decide to order a new tenancy in any event.

Question 10

The consequence of terminating the lease with fault or no-fault ground

Answer 10

no fault grounds: tenant has a right to compensation from the landlord quitting the premises.

fault ground: no right to compensation. unless the ground is to provide alternative accommodation and if provided the tenant has no right to compensation

Question 11

Can court order a new lease?

Answer 11

The court can if either
the landlord has failed to establish an opposition ground or
the landlord does not oppose the tenant’s application

Question 12

maximum fixed term that a court can order

Answer 12

15 years