Landlord and Tenant Act 1954
The Landlord and Tenant Act 1954 (LTA 1954) is an incredibly important piece of legislation for any landlord or tenant of a commercial property. Under the LTA 1954, a tenant has a statutory right to renew its tenancy at the end of the term. This is also known as a ‘protected tenancy’. Very often whether or not the LTA 1954 is to apply will form part of the Heads of Terms agreed by the landlord and tenant when negotiating the terms of the lease. If the lease is silent as to the LTA 1954, then the provisions of LTA 1954 will apply.
A tenancy protected by the LTA 1954 will not end once the term of the lease has expired but will, rather, continue under the terms of the expired lease until it is terminated or renewed by the parties. The landlord will only be allowed to refuse a renewal on certain grounds, such as for owner occupation or redevelopment.
It is possible to exclude the provisions of the LTA 1954 as long as this is documented and recorded in the correct way.
Parties agreeing to create an excluded tenancy and contracting out of the LTA 1954 are essentially agreeing that:-
- The tenant has no right to remain in the property once the lease has expired.
- The tenant must leave the property at the end of the lease unless the landlord offers a new lease.
- The tenant has no right to compensation from the landlord on leaving the property at the end of the lease.
- The tenant has no right to ask the court to fix the rent if the landlord offers another lease.
If the lease contracts out of the LTA 1954 then there is no right of renewal at the end of the tenancy and the lease will not continue. The landlord would not have to give notice and any renewal of the lease would be subject to negotiation by the parties. However, if the tenancy continues after the expiry of the lease (i.e. the landlord continued to receive payments of rent from the tenant after the expiry of the lease) then, in some circumstances, it would gain the protection of the LTA 1954.
WHAT DO I NEED TO DO TO EXCLUDE THE LTA 1954?
The LTA 1954 does not require a landlord to justify within the body of the lease why it is to be excluded. It all depends on what the parties have agreed between themselves. Once it has been agreed that the LTA 1954 should be excluded, however, there are various provisions that must be satisfied before it can effectively be excluded. For example, the lease would need to be for a fixed term (rather than year to year). A Statutory Declaration Procedure or Advanced Notice Procedure needs to be carried out. There are warning notices and prescribed time limits in these procedures that need to be strictly adhered to before completion.
WHY DO I NEED A SOLICITOR?
At Sanders Witherspoon LLP we have considerable experience in acting for both landlords and tenants in relation to leases contracted both inside and outside of the Landlord and Tenant Act 1954. Maybe you are a landlord who wishes to lease out a commercial property for a fixed period of time and then at the end have the ability to redevelop the site? Equally you may be a tenant who is starting up a business and needs to have security that you can remain at the intended property for a number of years as you build up reputation and goodwill. It is essential that the correct requirements of the LTA 1954 are adhered to otherwise the provisions are unlikely to be enforceable. We can make sure that everything is dealt with effectively and efficiently so that you can have peace of mind as to your position.