Protected Business Tenancies

Question 1

How to qualify for protected tenancy

Answer 1

• must be a tenancy (ie not license or tenancy at will)
• must be occupied by tenant
• occupation for purposes of a business

Question 2

Excluded tenancies

Answer 2

Agricultural leases
Mining leases
Service tenancies
Fixed term tenancy of 6 months or less (but can gain security if in occupation of 12m or more)

Question 3

Can you contract out fixed term tenancy

Answer 3

Yes

Question 4

Can you contract out periodic tenancy

Answer 4

No

Question 5

Procedure for contacting out

Answer 5

1. LL serve warning notice on T in prescribed form detailing consequences of contracting out before parties complete
2. Tenant provide declaration in prescribed form to LL before completion.

• if lease completion is 14 days from date of warning - simple signed declaration
• if lease completion is less than 14 days from date of warning - T provide statutory declaration (signed before independent solicitor)

3. Lease must contain reference to warning notice and declaration

Question 6

If procedure for contracting out is not correctly followed?

Answer 6

Lease will enjoy security of tenure

Question 7

What happens at end of non-protected tenancy

Answer 7

T has no right to occupy. If stay beyond = trespasser

Question 8

What happens at end of protected tenancy

Answer 8

T can stay and hold over, or leave

T’s occupation can only be brought to an end by certain methods

Question 9

How can landlord end protected tenancy

Answer 9

Forfeit lease - if possible

Serve hostile s25 notice

Question 10

When must s25 notice be served

Answer 10

No less than 6 months and no more than 12 months before date of termination (date when tenancy will end)

Question 11

What is a friendly s25 notice

Answer 11

Indicates LL willing to renew tenancy to start day after termination - proposes rent to be paid and principal terms

Question 12

What is a mandatory ground re opposing renewal

Answer 12

If LL establishes this ground, court must grant possession to landlord

Question 13

Examples of mandatory grounds to oppose renewal

Answer 13

LL intends to occupy (only do this if owned reversion for 5 years)

LL intends to demolish, reconstruct or carry out substantial works

LL has offered suitable accommodation

Question 14

On what statutory grounds to oppose renewal of lease would LL have to pay compensation

Answer 14

Intention to occupy premises

Intention to demolish, reconstruct or carry out substantial works

Question 15

What is a discretionary ground to oppose renewal of lease

Answer 15

Court can decide if the lease should be renewed/ terminated

Question 16

Examples of discretionary grounds to oppose grant of lease

Answer 16

Breach of repairing obligation
Persistent delay in paying rent
Substantial breaches of tenant obligation

Question 17

How can tenant end tenancy?

Answer 17

Vacate at end of premises

Serve s27 notice to leave premises

Question 18

When must s27 notice to leave premises by served by tenant

Answer 18

No less than 3 months before termination date. Once served, cannot change mind and serve s26 to renew.

If tenant is holding over, must serve s27 notice and give 3 months notice

Question 19

How can tenant request new tenancy

Answer 19

Serve s26 notice

Can hold over instead, but this provides more security

Question 20

Requirements to serve s26 notice

Answer 20

Must have lease with contractual term of one year or more

Question 21

Notice period to send s26 notice

Answer 21

No less than 6 months and no more than 12 months from PROPOSED COMMENCEMENT DATE (which must be after termination)

Question 22

What can LL do on receipt of s26 notice

Answer 22

Agree new lease

Serve counter notice within 2 months (hostile s25 notice)

Question 23

Deadline for applying to court to renew/terminate tenancy

Answer 23

After service of s25 notice - either party may apply at any time after service of notice, as long as it is before date of termination specified in notice

After service of s26 notice to renew- can only apply to court after 2 month period in which LL can serve counter notice. Deadline is day before proposed commencement date of lease

Question 24

Possible court orders

Answer 24

New lease - can only grant new lease up to 15 years. Rent will be open market.

Termination - brings existing lease to an end and tenant has no right to renew

Question 25

What can T do if not happy with terms of new lease granted by the court

Answer 25

Ask court to revoke within 14 days. No right to renew after this.

Question 26

Period to appeal new lease/termination order by court

Answer 26

21 days

Question 27

When will court order (new lease or termination) being existing tenancy to an end?

Answer 27

3 months and 21 days after date of order

Question 28

Interim rent payable during hold over / negotiation period

Answer 28

Rent at amount it was when last renewed

Either party can apply to court to fix interim rent based on open market - can go up or down

Question 29

If court fixes interim rent, when will this be payable from

Answer 29

Earliest date of termination - eg 6 months from s25 or s26 notice.

Question 30

What is a competent landlord for these purposes?

Answer 30

Both s25 and s26 notice procedures must be conducted by tenant and competent landlord (who may not be immediate landlord)

Competant landlord is first in chain of landlords to own reversionary interest that will not come to an end in 14 months time

Question 31

Date rules

Answer 31

A notice expires on same date as date on which it was served, eg a 6 month notice served on 1 Jan will expire on 1 July

A notice served on last day of month will end on last day of the appropriate month if it is shorter, eg 6 month notice served on 31 August will end on 28 Feb (or 29 if leap year) - corresponding date rule