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Security of Tenure Condesned Notes
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Chapter 6 – Commercial Security of Tenure SGS 7 – Security of TenureSecurity of Tenure
Protection Landlord and Tenant Act 1954 (1954 Act), s.24(1) protect commercial tenants –
1. Tenancy will continue after the contractual expiry date (CED) until terminated in one of the ways
provided by the Act (hold over)
2. Tenant will have the right to apply for a new tenancy on termination
A lease for a term of 10 years (for calculating the CED) –
From and including 24 March 2018 includes 24 March and will expire on 23 March 2028
Commencing on 24 March 2018 includes 24 March and will expire on 23 March 2028
From 24 March 2018 excludes 24 March, commences on 25 March and expire on 24 March 2028
Scope Included tenancies
The Act applies to tenancies occupied for the purpose of a business (1954 Act, s.23(1) –
1. Tenancy
o Must meet the Street v Mountford requirements (exclusive possession for a term absolute)
o Does not apply to licenses or tenancies at will
2. Occupation
o Tenant must occupy (or that part of) the premise
o Protection of the Act is lost if underlet
3. Business
o Defined widely as ‘trade, profession or employment’ (1954 Act, s.23(2))
o Member’s tennis club and charities are businesses
o A Sunday school is not a business
o Incidental residential use is acceptable, business must be significant purpose of occupation
Excluded tenancies
Certain tenancies are specifically excluded from the protection of the Act (1954 Act, s.43) –
Tenancies of agricultural holdings (1954 Act, s.43(1))
Mining leases (1954 Act, s.43(1))
Service tenancies (1954 Act, s.43(2)) – lease is a part of tenant’s employment (e.g. security guard)
Fixed term tenancies not exceeding 6 months (1954 Act, s.43(3)), save the following circumstances –
o Tenant has been in occupation for 12 months or more (two successive tenancies)
o Tenancy is renewable beyond 6 months
Contracted out tenancies
Landlord and tenant can agree to exclude the lease from the protection of the Act before granting the lease
A protected lease could potentially command a higher rent
Contracting out must be done according to the Regulation Reform (Business Tenancies) (England and Wales)
Order 2003 (‘Reform Order’) –
1. Landlord must serve warning notice at least 14 days before entering into (or an agreement for) a lease
2. Tenant must sign a simple declaration stating it has accepted the consequence of the notice or
(a) 14-day notice period can be waived by a statutory declaration in place of a simple declaration
(b) Must be made in front of an independent solicitor
3. Lease must contain –
(a) Wording that the parties have agreed to exclude security of tenure and
(b) Reference to the warning notice and the tenant’s declaration
Termination Under the Act
Notices 1. Landlord’s notice of termination (1954 Act, s.25)
(a) A friendly notice – landlord not opposed to tenant’s application for new tenancy
(b) A hostile notice – landlord oppose to tenant’s application for new tenancy
2. Tenant’s request for a new tenancy (1954 Act, s.26)
3. Tenant’s notice of termination (1954 Act, s.27)
Once a landlord has served a s.25 notice, the tenant cannot then serve a s.26 request
Once a tenant has served a s.26 request, the landlord cannot then serve a s.25 notice
Section 25 Notice
A notice served by the landlord to the tenant setting out a specified termination date (STD)
1. Landlord serves s.25 notice on the tenant
1
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