Security of Tenure for Commercial Tenants Flashcards
What does Security of Tenure (SoT) provide for commercial tenants?
It gives tenants the right to stay in leased premises for an additional term unless the landlord terminates the lease using statutory methods.
Which act confers Security of Tenure?
The Landlord and Tenant Act 1954.
How can a business tenancy be automatically terminated?
Through forfeiture, surrender, a landlord’s s25 notice, or a tenant’s s26 notice.
Are commercial leases under 6 months exempt from SoT?
Yes, commercial leases of less than 6 months and contracted out leases are exempt from SoT provisions.
What must a landlord do to contract out of SoT?
Serve a health warning notice at least 14 days before the lease completion; the tenant must sign a declaration in front of a solicitor.
What is a landlord’s s25 notice?
It informs the tenant that the landlord requires the premises back or wishes to negotiate a new lease, served 6-12 months before the desired end date.
What grounds must a s25 notice specify?
One of five statutory grounds for reclaiming possession (e.g., tenant’s breach, landlord intends to occupy, etc.).
What is a tenant’s s26 notice?
A notice of desire for a new lease that must be served 6-12 months before the new tenancy starts, allowing the landlord 2 months to respond.
What happens if the landlord opposes a tenant’s s26 request?
They must specify one of the five statutory grounds for opposition. If the landlord’s grounds include occupation or demolition, the tenant is entitled to compensation.
How is compensation calculated based on the length of occupancy?
If occupied for less than 14 years, compensation is the rateable value; if more than 14 years, it’s twice the rateable value.
