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Last edited 27 Nov 2017
Landlord and Tenant Act
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.
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.
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.
 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.
 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.
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.
 Related articles on Designing Buildings Wiki.
- Break clauses in leases.
- Comparable rent accusations.
- Ground rent.
- Lease Negotiations - Tenants Checklist.
- Leasehold covenants.
- Property guardianship.
- Rent-free period.
- Rent in administration.
- Rent review.
- Sample retail lease.
- Security of tenure.
- Service charge.
- Short term lets.
- Statutory declaration excluding security of tenure.
- Vacant possession.
 External references
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