Security of tenure Flashcards
What is security of tenure?
Means the lease can only come to an end in one of the ways prescribed or permitted by LTA 1954
- tenant or landlord can apply to court for grant of a new tenancy
What does security of tenure apply to?
Any tenancy occupied by the tenant for business purposes
What tenancies can benefit from security of tenure?
- Fixed term tenancy
- A periodic tenancy
What cannot benefit from security of tenure?
- Licence
- Tenancy at will
What are excluded tenancies?
- Fixed term tenancy of 6 months of less
- Service tenancies (lease agreed to further/better perform employee obligations)
- Mining lease
- Agricultural tenancies
What is a service tenancy?
- employer/employee relationship between landowner and occupier
- occupier required to live in premises for the better performance of their duties as an employee
- no tenancy
What is contracting out?
Allows parties to agree to exclude a fixed term lease from security of tenure provisions
- only fixed term leases can be contracted out
- if do not contract out = security of tenure is applicable
What are tenancies commonly contracted out?
- Short term lease (5 years or less)
- Underleases
Procedure for contracting out
- Landlord must serve a warning notice on tenant in prescribed form
- Tenant provides declaration
- if lease completed at least 14 days of warning notice - simple signed declaration
- if lease completion is less than 14 days away - tenant must provide a statutory declaration
What must be included in the lease for it to be properly contracted out?
The lease must contain reference to both the notice and declaration of contracting
- If not - lease likely still enjoy security of tenure
What are the consequences for tenant of a non-protected tenancy at end of contractual term?
A tenancy which is not protected by security of tenure:
- tenant has no right to occupy beyond the contractual term
Consequences of a protected tenancy (security of tenure)
Tenant has the right o stay in occupation
- holding over
- landlord cannot evict the tenant - can only bring to an end under methods allowed under LTA 1954
What are the landlord’s options for ending a protected tenancy?
- Forfeit the lease if there is a breach of tenant covenants and lease allows this (right to forfeiture)
- security of tenure does not prevent landlord from forfeiting the lease if tenant is in arrears and lease permits this - Serve s25 notice
What are the tenant’s options for ending a protected tenancy?
- Simply vacate premises at end of contractual term
- Surrender the lease with landlord’s agreement
- Periodic tenancy - serve notice to quit
- Serve s26 notice to request a new tenancy
- Serve s27 notice to leave premises
What is a s25 friendly notice?
Served by landlord on tenant
- brings current tenancy to an end
- states date of termination
- willing to grant new tenancy
- sets out proposed terms
What is a s25 hostile notice
- the same except
- opposes grant of new tenancy
- must have grounds (discretionary and mandatory grounds)
What is a s26 notice
Served by tenant on landlord
- tenant requests a new tenancy
- sets out a proposed start date for the new tenancy (date of proposed start)
- date of termination will be day before
- sets out terms of proposed tenancy
Must be in prescribed form
- the existing lease will terminate the day before the start of the new tenancy
What if the landlord objects to s26 notice by tenant?
The landlord will need to send a counter notice
- will need to satisfy the mandatory/discretionary grounds
How long does landlord have to serve a s26 counter-notice
2 months from s26 notice
What is a s27 notice?
Used by the tenant to bring a lease to the end and do not want a new tenancy
- no prescribed form (can be in the form of a letter)
- brings holding over to an end
How much notice must be given under s27 notice?
Tenant must give 3 months notice of the intended termination date
When should the tenant vacate the premises?
If the tenant does not want a new tenancy on the same premises and contractual expiry date has not yet passed
- tenant should vacate on or before CED to terminate on the CED
- if the tenant continued to hold over, it would need to serve s27 notice giving at least 3 months notice to end the tenancy
What should the tenant do if they want to vacate premises as soon as possible?
Vacate the premises
- the tenant can leave the premises on the contractual expiry date of the lease
- However, if they start holding over they would have to serve a s27 notice and a minimum of 3 months notice is required - not the best advice if they want to end the tenancy as soon as possible
Terms of new lease
- premises are same
- new term cannot exceed 15 years
- open market rent
- other terms can be determined by the court
Court can determine terms, but a term will not exceed 15 years
