Are you thinking of taking on a commercial lease or are you approaching the end of your current term? If so you should be aware of the provisions of the Landlord & Tenant Act 1954.

When does the Act apply?

The Act provides that, with certain exceptions such as occupational tenancies and those under 6 months long, all commercial leaseholders have an automatic right to continue with a new lease after the term of the original has expired. This is a useful safeguard for commercial tenants in relation to renewing the term and fixing the new rent

Notices

The Tenant must serve notice on the Landlord in the prescribed form in order either to renew or to terminate the lease and comply with time limits. If the Landlord wishes to oppose the grant of a new lease then a counter notice will have to be served, again in the prescribed form and with strict timescales. However, the renewal can only be opposed on a very limited number of grounds. These are principally to do with the Tenant being in breach of one of the principal terms of the lease or the landlord requiring the premises for its own use or redevelopment.

Excluding the Act by agreement

It is possible for the provisions of The Act to be excluded by agreement of the parties before the commencement of the lease. The Landlord has to serve notice in the prescribed form and within the required period and the Tenant has to sign a declaration that the implications of the exclusion are appreciated and agreed to. If you are thinking of taking on a lease it will be important to know if the landlord wants to exclude the Act.

Take advice

The operation of the Act is very tightly interpreted by the courts and great care has to be taken in order to comply. Costly litigation could result if proper action is not taken at the correct time. Contact me for advice in relation to this complex area.