Termination of leases and security of tenure under Part II of the Landlord and Tenant Act 1954

Question 1

What does the Landlord and Tenant Act 1954 automatically provide?

Answer 1

Security of tenure for business tenancies

Question 2

What are business tenancies?

Answer 2

Defined as ‘any tenancy where the property comprised in the tenancy is or included premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by or for those and other purposes

Question 3

What does security of tenure mean?

Answer 3

• the usual common law methods of termination of a lease may not apply
• even after the contractual expiry date, a lease may continue under the Act unless and until it is terminated under one of the prescribed/specified methods
• on termination there is a presumption that the tenant will generally be entitled to a new protected lease on similar terms unless the landlord can prove on of the grounds of opposition
• if the parties cannot agree the terms the court may intervene
• if a renewal lease is not granted, due to grounds of opposition relating to the default of the tenant, the tenant may be entitled to compensation

Question 4

What are the common law methods of termination of a lease?

Answer 4

• effluxion of time
• notice to quit
• surrender
• merger

Question 5

What is effluxion of time?

Answer 5

A fixed term lease may expire by effluxion of time which means that it automatically ends following the expiry of the contractual term without the need to give notice

Question 6

What is a notice to quit?

Answer 6

A periodic tenancy may be terminated by either party giving one full period’s notice expiring at the end of the relevant period or at least 6 months’ notice in the case of a yearly periodic tenancy

Question 7

What is surrender?

Answer 7

When the parties each agree for the lease to come to an end before the contractual expiry date. It causes the lease to be merged with the landlord’s reversionary interest.

Question 8

How must a surrender be made?

Answer 8

By deed to take effect in law

Question 9

What happens if there is a subtenant and the headlease is surrendered?

Answer 9

The subtenant becomes the immediate tenant of the head landlord on the terms of the sublease

Question 10

What is a merger?

Answer 10

When the tenant acquires the immediate landlord’s estate/reversion or both the lease and the reversion are acquired by the same party at the same time. The lease becomes merged wit the reversionary interest

Question 11

How is a tenancy different to a licence?

Answer 11

Tenancy - exclusive possession
Licence - mere personal right

Question 12

For application of the Act the property must be occupied by the tenant for business purposes. What is business defined as?

Answer 12

Including ‘a trade, profession or employment and … any activity carried on by a body of persons, whether corporate or incorporate - includes things like sports clubs

Question 13

What is excluded from the definition of business tenancies?

Answer 13

• licences that do not confer exclusive possession therefore not tenancies
• tenancies at will
• some short fixed-term tenancies - under 6 months unless contains provision for renewal extending beyond 6 months or where the tenant or its predecessor have been in occupation and carrying on the same business for over 12 months
• leases of agricultural holdings
• contracted out tenancies

Question 14

What is a contracted out tenancy?

Answer 14

A fixed-term tenancy under which the parties expressly agree (using a prescribed process) that the provisions of sections 24-28 of the Act will not apply

Question 15

What are the methods or termination permitted under the Act?

Answer 15

• s25 notice
• s26 notice/request
• s27 notice
• ceasing to be in occupation on the expiry of a fixed-term lease: effluxion of time
• service by then tenant (but not the landlord) of a notice to quit in relation to a periodic tenancy if they have been in occupation for at least a month
• forfeiture
• surrender

Question 16

What is a s25 notice?

Answer 16

A landlord’s notice to terminate a fixed-term or periodic tenancy with or without proposals for a new tenancy

Question 17

What must a s25 notice include and when must it be served?

Answer 17

It must include the start date on which the tenancy will terminate and be served not less than 6 nor more than 12 calendar months before the proposed termination - notice will be invalid

Question 18

When is it not possible to serve a s25 notice?

Answer 18

If a s26 request or s27 notice has already been served

Question 19

What does the tenant need to do if served a s25 notice?

Answer 19

hostile notice - application to court for a new tenancy
non-hostile notice - seek to negotiate and make an application to the court for a new tenancy

Question 20

What is a s26 request?

Answer 20

It is a tenant’s request to terminate an existing fixed-term tenancy and have a new tenancy

Question 21

When can a s26 request only be served?

Answer 21

If the tenant has a fixed-term tenancy of more than 1 year

Question 22

When is it not possible to serve a s26 request?

Answer 22

If a s25 notice or s27 notice has already been served

Question 23

Following the service of a s26 request, what happens if a landlord opposes the new tenancy?

Answer 23

• the landlord must serve a counter notice within 2 months
• the tenant must make an application to the court for a new tenancy
• the landlord may apply to the court to terminate the lease but not if the tenant has already made an application for a new tenancy

Question 24

Following the service of a s26 request, what happens if the landlord does not oppose the grant of a new tenancy?

Answer 24

• a counter-notice does not need to be served
• the tenant should make an application to the court for a new tenancy
• the landlord can also apply to the court for the grant of a new lease

Question 25

Who must a s26 request be served upon?

Answer 25

The competent landlord - the landlord owns the freehold or has a tenancy that will not come to an end by effluxion of time within the next 14 months

Question 26

If there is doubt as to the competent landlord what can the tenant do?

Answer 26

Serve a s40 on their immediate landlord which requests information about occupation and sub-tenancies or the landlord’s interest and service of any s25 or s26 notices - the recipient has 1 month to reply

Question 27

What is a s27 notice?

Answer 27

A tenant’s notice to terminate a fixed-term tenancy on or after the contractual expiry date, provided that they have been in occupation for at least 1 month

Question 28

When is it not possible to serve a s27 notice?

Answer 28

When a s25 notice or s26 request has already been served

Question 29

What are the landlord’s grounds of opposition?

Answer 29

a) tenant’s failure to repair the holding
b) persistent delay in paying rent
c) substantial breach of obligations
d) suitable alternative accommodation
e) underletting of part
f) demolition/reconstruction
g) intention to occupy

Question 30

Which landlord’s grounds are mandatory meaning the court must refuse to grant a renewal tenancy if the ground is established?

Answer 30

• suitable alternative accommodation
• demolition
• intention to occupy

Question 31

Which landlord’s grounds are discretionary meaning the court may refuse to grant a renewal tenancy if the ground is established?

Answer 31

• tenant’s failure to repair the holding
• persistent delay in paying rent
• substantial breach of obligations
• underletting of part