3rd June 2024

Understanding Sections 24 to 28 of the Landlord and Tenant Act 1954

The Landlord and Tenant Act 1954 (the Act) has long been a cornerstone of the legal framework governing commercial tenancies. Within this seminal piece of legislation lie various sections that outline the rights and obligations of both landlords and tenants. Sections 24 to 28 outline provisions regarding the renewal of tenancies, offering essential protections and procedures for both parties involved. New commercial tenants need to familiarise themselves with the rights under the Act when a new lease is being granted. 

The right to renewal is outlined in Section 24 of the Act, it establishes the right of business tenants to apply for a new tenancy upon the expiry of their existing lease. This provision grants tenants to security of tenure, ensuring they have the opportunity to continue their occupancy of the premises for ongoing business operations. However, if these sections are being excluded by a lease, the tenant will not have security of tenure and will therefore lose the automatic right to renew the lease at the end of the term. Tenants may face the risk of losing the premises if the landlord decides not to renew the lease or offers less favourable terms upon renewal.

Section 25 outlines the procedural steps for both landlords and tenants in the renewal process. It specifies the timeframe within which the landlord must serve notice to terminate the tenancy or propose new lease terms. Likewise, it delineates the period during which a tenant may request a new lease or contest the landlord’s proposed terms. If you have been served a notice under the Act, you should take the notice seriously and seek legal advice.

The landlord can serve a counter-notice under Section 26 of the Act, once a tenant has requested a new lease the landlord can respond with a counter-notice. This counter-notice can either agree to the tenant’s request or propose alternative lease terms, including adjustments to rent, duration, or other conditions of the tenancy. They may go further and refuse a renewal tenancy on one or more grounds set out in Section 30 of the Act. These include breaches of covenants in the lease by the tenant, landlord redevelopment or landlord self occupation of the premises.

Should the landlord and tenant fail to reach an agreement on the terms of the new lease, the Act provides for the parties to apply to the Court to resolve the dispute. The Court has the authority to determine the terms of the renewal lease, taking into account the interests of both parties, the terms of the existing lease, and market conditions.

Sections 24 to 28 of the Act play a crucial role in balancing the rights of landlords to manage their properties with the need to provide tenants with security and stability. By establishing clear procedures for lease renewal, these provisions contribute to a more equitable and transparent commercial tenancy regime.

Whilst there has been talk of reform of this 70 year old legislation, the Act, particularly Sections 24 to 28, remains a vital piece of legislation shaping the landlord-tenant relationship in commercial premises, in an attempt to promote fairness and stability in the commercial property market.

 

If you are in need of legal advice on any of the above, or another commercial property matter, get in touch at 01892 510 222.

Olusola Makinde

Olusola Makinde
Solicitor