Security of Tenure for Commercial Tenants

Question 1

Security of tenure gives a ___________ tenant a right to ____ in the leased premises for an additional _____ at the end of the tenancy, unless the landlord uses one of the statutory methods of ____________ the lease

Answer 1

commercial, stay, term, terminating

Question 2

Commercial leases of less than how many months are exempt from the security of tenure provisions?

Answer 2

Less than 6 months

Question 3

What are the three requirements for a landlord (L) and tenant (T) to contract out of security of tenure?

Answer 3

1. L serves a health warning notice on T at least 14 days before commencement of lease
2. T signs a declaration confirming sight of warning
3. Lease references the warning, declaration, and agreement to contract out

Question 4

What 4 explanations should be included in a health warning notice?

Answer 4

1. Nature of security of tenure
2. Potential T will give up rights under the lease
3. Consequence of T not having security of tenure
4. T should seek professional advice

Question 5

At leas how many days before commencement of a lease must L serve a health warning notice to T?

Answer 5

14 days

Question 6

When can a landlord serve the health warning less than 14 days before commencement of the tenancy?

Answer 6

If the tenant signs a formal statutory declaration in front of an independent solicitor confirming waiver of the 14 day notice period.

Question 7

What notice must L serve to T to seek a termination of a commercial tenancy?

Answer 7

Section 25 notice

Question 8

What notice must T serve to L when they desire a new commercial lease?

Answer 8

Section 26 notice

Question 9

How many months before the end of the existing tenancy does L have to serve a Section 25 notice to T?

Answer 9

6-12 months

Question 10

What are the 7 statutory grounds that a Section 25 notice must be based on?

(clue: 4T, 3L)

Answer 10

1. T’s failure to carry out repair obligations
2. T’s persistent delay in paying rent
3. T’s substantial breaches of other obligations
4. Availability of suitable alt. accommodation for T
5. L requires whole of property for letting
6. L intends to redevelop/demolish premises
7. L intends to occupy premises

Question 11

For a Section 25 notice, what type of grounds are T’s breach of obligations and L requiring whole of property for letting, and what does this mean?

Answer 11

They are discretionary grounds

This means even if L establishes these grounds, a court may still decide to order a new tenancy

Question 12

For a Section 25 notice, what type of grounds are alternative accommodation, demolition/reconstruction, and occupation, and what does this mean?

Answer 12

They are mandatory grounds

This means if established, the court must refuse to order a new tenancy

Question 13

How many months before the end of the existing tenancy does T have to serve a Section 26 notice to L?

Answer 13

6-12 months

Question 14

Upon receipt of a Section 26 notice, how long does L have to inform T whether they intend to oppose a request for a new tenancy?

Answer 14

2 months

Question 15

What must L establish if they are unwilling to agree to a new lease under Section 26 notice?

Answer 15

One of the 7 statutory grounds

Question 16

Under what 3 grounds of termination is T entitled to statutory compensation?

Answer 16

1. L’s Letting
2. L’s Demolition/reconstruction
3. L’s Occupation

(i.e. the ‘no-fault’ grounds)

Question 17

Under which 4 grounds is T not entitled to statutory compensation?

Answer 17

1. T’s failure to carry out repairs
2. T’s persistent delay in paying rent
3. T’s substantial breach of other obligations
4. Alternative suitable accomodation is available for T

(note: 1-3 would be classed as ‘fault grounds’)

Question 18

How many years must T have occupied the premises in order to be entitled to twice the rateable value of the holding?

Answer 18

14 years

Question 19

What is T entitled to if they’ve occupied the premises for less than 14 years?

Answer 19

Rateable value of the holding

Question 20

If the parties cannot agree to the terms of a new lease, what order can the court make?

What is the maximum term?

Answer 20

The court can order the grant of a new tenancy on such terms as it determines under the 1954 Act

For a term not exceeding 15 years