Week 9- Business Tenancies

Question 1

What is the effect of SOT?

Answer 1

Having SOT means lease can only come to an end in one of the ways prescribed/permitted by the Act and T or L can apply to the court for an order for the grant of a new tenancy.

Question 2

Who can apply to the court for grant of new tenancy under LTA 1954

Answer 2

Either T or L

Important that L has right to go to court here to reduce uncertainty and force T to make decision re new tenancy.

Question 3

Describe the benefits of SOT for T

Answer 3

1. Can invest in improvements to property
2. Goodwill from location (esp for retail/restaurant business)
3. No need to build business from scratch and upheaval of moving.

Question 4

Describe the benefits of SOT for L

Answer 4

1. The premises will be more appealing to prospective tenants.
2. T encouraged to make improvements, increasing value of property.
3. T encouraged to look after the property very well.
4. It may be beneficial to L at rent review, as the market rent may be higher for a lease enjoying security of tenure.

Question 5

What are the 3 conditions for when SOT applies?

Answer 5

1. Tenancy (licence and tenancy at will don’t count)
2. Occupied by tenant
3. Occupied for the purposes of a business

Question 6

If T underlets the property, are they ‘in occupation’?

Answer 6

If the tenant underlets the whole or the part of the premises, then it follows that it cannot be in occupation and will lose SOT over the whole or part of the premises accordingly- loses SOT in respect of the part which is underlet.

Question 7

What does it mean to occupy for business purposes? Give some egs

Answer 7

Occupying for purpose of “trade, profession or employment”.

Egs:
* Charity shop
* Tennis club for members only
* Residential use that furthers the tenant’s business (eg, accommodation for medical school students or a lease of a shop, part of which could be used for residential purposes)

Question 8

What are the 4 types of tenancies which are excluded from SOT?

Answer 8

1. Agricultural tenancies (as they have their own statutory regime)
2. Mining leases
3. Service tenancies (a lease granted as part of a tenant’s employment, eg, a security guard’s flat)
4. Fixed term tenancies of 6 months or less