Articles

• No Smoking Ban - Devon Today - August 2007

• Business Tenancies - Landlord and Tenant Act 1954  

The Landlord and Tenant Act 1954 was introduced to protect the security of tenure of business premises.  The Act also limits the powers of the landlord to increase the rent on renewal of a Lease.

Most of the following rules apply both to fixed term tenancies and periodic tenancies.

Since 1954 the case law has developed as the Courts have considered the various provisions of the Act.  Moreover considerable changes were made to the Act in 2004.

The Act provides that on expiry of a lease the tenant has a right to renew it at the current market rent.  If the rent cannot be agreed it is fixed by the Court after hearing evidence from surveyors.  If the tenant wants to renew his lease there are only limited grounds on which the landlord can refuse.   Some of these grounds for opposition centre around bad performance by the tenant of his obligations under the old lease.  Additionally, the landlord may be able to avoid renewing the lease if he can offer the tenant reasonable alternative accommodation, or if he intends to demolish or reconstruct the premises, or if he intends to occupy the holding for his own purposes.  (This last ground is not available if the Landlord has purchased the property within the previous five years.)  There is an additional ground for refusing to renew the lease if it was created by sub-letting part of the property in the Landlord's ownership and a better return could be obtained by dealing with the property as a whole. In some circumstances the landlord must pay the tenant compensation if the lease is not renewed.

The protection of the Act can extend to residential property which is let with business premises.  It can also protect tenants such as voluntary organisations and associations.  For example it has been held that tennis clubs and sports grounds and premises used for church social events fall within the Act.

It is possible for the Landlord and Tenant to agree to exclude the provisions.  For such an agreement to be valid the parties must have followed a defined procedure (which was altered in 2004) before the tenant went into possession and before the tenancy commenced or there was a binding commitment to enter into the lease.

Some of the provisions of the Act are complicated.  If things go wrong the consequences for the landlord or the tenant can be extremely serious.  We strongly recommend that anyone who owns premises or is thinking of renting them takes proper legal advice before signing any papers or (if they are the landlord) allowing the tenant to take possession or (if they are the tenant) moving into the premises.  When the lease is approaching expiry date all parties need to obtain further advice on their legal positions and the options open to them.  If notices are then served, you need to comply with strict time limits to protect your position

This article contains only a summary of this area of the law and it is essential to obtain specific detailed advice which is tailored to your particular situation.

This article appeared in the July 2005 edition of Devon Today and was correct at time of going to press. Please contact us for up-to-date information.