Commercial Leases - What is Security of Tenure?
Two questions that often get asked in connection with commercial leases are “what is security of tenure?" and “what is the effect of a lease being granted with or without it?". Martyn Chadderton, Solicitor at Glanvilles explains how the 1954 Act can affect commercial leases.
Security of tenure applies to most commercial leases over 6 months unless the provisions contained in Part II of the Landlord and Tenant Act 1954 ("the 1954 Act") have been specifically excluded. It acts as protection for the tenant to prevent eviction at the end of the fixed term. In order to regain possession the landlord must serve a notice under the 1954 Act stating one or more of the grounds specified in the 1954 Act as to why they oppose the renewal of the lease. These grounds range from the landlord wanting to redevelop the property, to the tenant having a poor history in observing the covenants under the lease.
What if I have a 1954 Act protected lease and want a new lease?
The tenant can agree the terms of a new lease with the landlord. If negotiations fail the tenant can apply to the Court for a new lease, which is likely to be granted unless the landlord can show the Court that one or more of the grounds for opposing the new lease apply. Alternatively the Landlord can apply to Court for the terms of the new lease to be determined or indeed for the termination of the current lease. It is important that Tenants respond to and or serve appropriate notices and comply with time limits otherwise they may lose their rights.
What if I want to end my 1954 Act protected lease?
The 1954 Act allows a tenant to determine the lease at the end of the contractual term either by giving the landlord at least three months notice or by simply vacating before the end of the term. If the tenant is still in occupation of the premises at the end of the contractual term, the tenant can determine the tenancy at any time by giving the landlord three months' notice.
What if my lease is excluded from the 1954 Act?
If your lease is excluded from the 1954 Act (and many leases are) your lease will automatically come to an end on the last day of the contractual term. If the tenant wants to stay in occupation they will have to agree terms with the landlord in advance of the end of the term either by signing a new lease or entering into an agreement for lease.
If you would like advice regarding the 1954 Act, or any other commercial property matter, please contact Glanvilles Business & Commercial Services team by email on commercial@glanvilles.co.uk or by using the 'Arrange a Consultation' form at the bottom of this page or using the contact us page.
Martyn Chadderton, Solicitor
