Last edited 06 Oct 2016

Landlord and Tenant Act


[edit] Introduction

The Landlord and Tenant Act 1954 is the governing legislation for landlords and business tenants. A business tenants is somebody who rents or leases the place where they conduct their business.

Part II of the Act offers business tenants legal protection for the value they may have built up in a location which would be lost if they had to leave their premises when the lease expired, for example; if they have installed a lot of equipment, If the location is vital to their operation, if business continuity is important and so on.

[edit] Application

For Part II of the Act to be applicable, the following conditions must apply:

  • There must be a tenancy (as opposed to a licence).
  • The tenant must be in occupation of the property for business purposes.
  • The tenancy must not be excluded from the Act. The main exceptions to the Act are set out in section 43 and include mining leases and agricultural premises. In addition, the Act does not protect leases that are less than 6 months which hold no scope to renew. In addition, if a tenancy is granted due to being employed, this is not covered, assuming there is a clear agreement in writing which documents the purpose of the tenancy.

[edit] Protection afforded to a tenant

In broad terms, the Act gives a business security of tenure which means they have the right to renew the tenancy when it ends. In a situation where both the landlord and tenant agree on a new tenancy, but cannot agree on the terms, it is possible for either party to apply to the court for the new tenancy. It is also possible for the tenant to apply if they would like a new tenancy but the landlord refuses to grant one. In such situations, the court will settle the rent and terms of the new tenancy.

[edit] Termination by a tenant

It is possible for a business tenant to terminate their lease by leaving the business premises on or before the termination date under the lease, or by the service of a statutory notice (to terminate no earlier than the termination date specified in the lease) giving the landlord 3 months notice and by vacating on or before the termination date specified in that notice.

[edit] Termination by a landlord

It is possible for a landlord to terminate a tenancy by the service of a statutory notice which provides a termination date not less than 6 months or more than 12 months after the notice has been served. The landlord must also prove a statutory ground for possession. It may be necessary for a landlord to satisfy the Courts if matters cannot be agreed with the tenants.

The landlord may have to pay compensation to a business tenant on obtaining possession of the premises based on a statutory ground, which is calculated as a multiplier of the rateable value.

If a landlord does not oppose the grant of a new business tenancy to the tenant, then this affords the landlord an opportunity to be paid the current market rent for the premises under the terms and conditions of the new lease.

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