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Notes on PLP Leasehold for the (Accelerated) LPC at BPP University.
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Hafsah Nawaz
Leasehold Exam Consolidation
Security of Tenure – General
Corresponding date rules and other rules
A notice expires on the same date as that on which it was served
o E.g. serve on 1 Jan for 6 months; expire on 1 June
‘From and including/commencing on’ – will expire on the date before that date in the relevant
year/month
o E.g. lease for 10 years from 24 March 2018 will expire on 23 March 2028
‘From’ – will commence the day after but expire on the same day
o E.g. lease for 10 years from 24 March 2018 will start on 25 March 2019 and expire on 24
March 2028
Errors in a notice
Errors can effect validity
Mannai Investment v Eagle Star- court will consider whether the notice is sufficiently clear to leave
a reasonable recipient in no reasonable doubt as to the terms of that notice
Contracting out procedure
S38A(1)- a landlord and tenant may agree to exclude the Act
S38A(3) procedure-
o Landlord must serve a warning notice on the tenant at least 14 days before ethe tenant
becomes bound to enter into the lease
o Tenant must sign a simple declaration stating that it has received and accepts the
consequences of that notice
o The lease must contain wording that the parties have agreed to exclude security of
tenure, with reference made to both the warning notice and the tenant’s declaration
If time is short and the above procedure can’t be followed-
o Warning notice can be waived
o Instead of simple declaration, statutory declaration must be made, in front of an
independent solicitor to a similar effect
o Lease wording requirements as above
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,Hafsah Nawaz
Security of Tenure – Tenant-Sideq1
Pre-step: State what is going on
Only a tenant protected by Part II LTA 1954 is entitled to serve a s26 request
Step 1- Does the 1954 Act apply?
Is S23 satisfied?
S23(1) states that for the Act to apply, you need a tenant, in occupation, for the purposes of a
business. ‘Tenancy’ must meet the requirements of Street v Mountford. The court will consider the
amount of control the tenant exercises over the premises to determine ‘occupation’. Business is
defined broadly in S23(2) as any trade, profession or employment.
[APPLY TO FACTS]
Is the tenancy excluded?
Option 1- The lease is not one of those tenancies excluded by S43 of the Act.
Option 2- The lease has been excluded from the protection of the Act by virtue of [STAT REF] and
therefore the 1954 Act does not apply.
o S41(1) as the tenancy is for an agricultural holding
o S43(1) as the tenancy is a mining lease
o S43(2) as the tenancy is a service tenancy (lease granted as part of a tenant’s employment)
o S43(3) as the tenancy is for a fixed term, not exceeding 6 months
Note- protection will be available if the business has been in occupation for 12+
months, or if the tenancy is renewable beyond 6 months
Has the tenancy been contracted out of the 1954 Act?
Option 1- There is nothing on the facts to suggest that the least has been contracted out of the
protection of the 1954 Act under s38A(1). To check the lease has not been contracted out of, you
would obtain a copy of the lease from [TENANT] and see whether it contains a clause stating that s24-
s28 have been excluded, making reference to the tenant’s declaration in relation to this exclusion.
Option 2- The lease makes reference to exclusion of s24-28 of the Act, plus the serving of the warning
notice and the tenant’s declaration, showing the following of the s38A(3) procedure. Therefore, the
1954 Act does not apply
Step 2- Explain the tenant’s rights under s24
S24(1) sets out 2 layers of protection for [TENANT].
First, the tenancy will continue after the CED until it is terminated by the service of a notice under the
Act. Here, the CED is [APPLY FACTS].
Second, the tenant has the right to apply to court for an for the grant of a new lease of the leased
premises.
Step 3- Have any 1954 Act notices already been served?
You should check that the landlord [LANDLORD] has not already served a s25 notice.
This is because a s26 request by the tenant [TENANT] for a new lease can only be served if the s25
notice has not already been served
Step 4a- Explain the requirements for service of the relevant notice
If [TENANT] wishes serve a s26 request, this must in the statutory prescribed form where ethe new
terms of the lease must be attached to the request, and the PCD is stated. This must be served on the
competent landlord (s44).
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, Hafsah Nawaz
Whilst the s26 request can be served either before or after the CED, here the CED [HAS/HASN’T] yet
passed, the PCD set out in the request must be at least 6 months but not more than 12 months away
from the date that the request is served by the tenant (s26(2)). Also, the PCD set out in the request
cannot be a date that is before the CED i.e. the PCD must be on the CED or afterwards (s26(4)).
Step 4b- Apply the requirements to the facts to achieve the client’s objectives
IF THE CED HAS PASSED- the earliest the request can be served is today. This means that the PCD
would be 6 months from today.
IF THE CED HAS NOT PASSED- you would serve the request at least 6 months before the CED. This
means that the PCD would be the CED.
Benefit of having the earliest possible PCD – if rents are falling
[TENANT] would want the earliest PCD possible [APPLY FACTS] so as to take advantage of lower rents
so that upon renewal, the lease would be at market rent i.e. a lower rent than it is paying under its
existing lease.
o Would serve request 6-12 months before the CED so that the PCD is the CED.
The benefit to [TENANT] if they are able to get the earliest PCD possible is that it will be easier for
them to subsequently assign or underlet the premises as they’d be taking advantage of the lower
rents.
Benefits of having the latest possible PCD – if rents are rising
[TENANT] would want the latest possible PCD [APPLY FACTS] so as to take advantage of the current
lower rents for as long as possible.
o Would serve the notice on the CED so that the PCD is 12 months after.
The risk to the tenant in this is that [LANDLORD] will seek to issue a s25 notice with the shortest
possible STD (i.e. 6 months) so that they are able to sooner take advantage of the higher rents.
A further risk to [TENANT] is that assignment/underletting may be made harder, because the assignee
or undertenant would be agreeing to a lease under which they’re having to pay a higher rent.
Risks of delaying the PCD – latest dates
The latest date for [TENANT] to serve the request for the ideal PCD would be [APPLY FACTS] i.e. 6
months before the PCD since there has to be at least 6 months between the date the request is
served and the PCD set out in it.
However, the risk to [TENANT] is that in the time that it takes to issue the request, the [LANDLORD]
may serve a s25 notice with a STD of 12 months from the date of service. If this occurs, then [TENANT]
risks having to pay an ‘above market level’ rent from the CED to the STD.
Step 5- What can be done to protect the tenant’s position?
Landlord’s counter notice
After [TENANT] has served a s26 request on [LANDLORD], [LANDLORD] has 2 months from the date of
service of the request in which to serve a counter-notice on [TENANT].
The counter-notice can either oppose [TENANT]’s application to court for the grant of a renewal lease,
and if so the counter-notice must set out [LANDLORD]’s s30(1) grounds of opposition.
Alternatively, [LANDLORD] could serve a counter-notice stating it has no objection to granting a
renewal lease to [TENANT] (s26(6)).
If [LANDLORD] does not serve a counter-notice within the 2 months of the request, it cannot oppose
the grant of a renewal lease to [TENANT], but can still negotiate on the terms of the renewal lease.
Court application
Either the tenant or the landlord can apply to the court.
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