Fawzia A. Rehman
Paralegal
14 Oct, 2010

The Landlord and Tenant Act 1954, Part II provides statutory protection for tenants who occupy a premises for the purpose of a business. The 1954 Act is significant in providing security for business tenants who would face losing business and goodwill if they were forced to leave their tenancy at the end of their lease term.The Act was brought about at a time when the economy was in turmoil and it was thought that giving security of tenure to business tenants would encourage investment and the economy to grow.

The Act provides key protection for business tenants by enabling them to apply to the court for a renewal of the tenancy and by allowing a tenancy to continue automatically at the end of the contractual term, thus allowing the lease to continue on the same basis and at the same rent (subject to any applications for interim rent) until it is brought to an end by the methods set out in the Act.

The most common form of termination by a landlord under the 1954 Act is by a section 25 notice. There are strict deadlines for serving notices under section 25, and notice must be given a minimum of 6 months, and not more than 12 months before the date the landlord intends the lease to end.

The landlord cannot bring the lease to an end before the contractual termination date. The landlord is limited in the grounds on which he can rely in opposing a tenant's application for a new tenancy. The statutory grounds are as follows:

1. tenant's failure to carry out repairing obligations;
2. tenant's persistent delay in paying rent;
3. tenant's substantial breaches of other obligations;
4. suitable alternative accommodation is available for the tenant;
5. in cases of a sub tenancy of part, possession is required for letting or disposing of the property as a whole;
6. the landlord intends to demolish or reconstruct the premises;
7. the landlord intends to occupy the premises himself.

The onus is on the landlord to prove the grounds on which they are relying on. If the landlord was to successfully oppose a new tenancy under grounds (e), (f) or (g) the tenant would be entitled to compensation in most circumstances.

There are a number of tenancies which are excluded from the 1954 Act for example, a tenancy at will, contracted out tenancies and fixed term tenancies not exceeding 6 months. It is vital that you do get professional advice in order to determine whether you do fall within the protection of the 1954 Act and what steps you need to take in the event that you are served with a section 25 notice.

This article is for general information purposes only and is not intended to be relied upon by any party in any circumstance.