Lease Renewal Under the Landlord and Tenant Act 1954
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Most business tenancies carry security of tenure under Part II of the Landlord and Tenant Act 1954. This is the framework every commercial landlord needs to understand, because it decides whether you can get your property back.
Security of tenure
If a lease has 1954 Act protection, the tenant has a right to renew when the contractual term ends. The tenancy continues automatically until it is ended by the correct statutory notice, and the tenant can require a new lease unless you oppose renewal on one of the statutory grounds.
Ending or renewing the tenancy
- The landlord serves a Section 25 notice, either proposing a new tenancy or opposing renewal.
- The tenant can serve a Section 26 notice requesting a new tenancy.
- Notices must be served within set time windows, generally between 6 and 12 months before the proposed date.
Opposing renewal
You can only refuse a renewal on one of the grounds in section 30, the most common being redevelopment (ground f) and own occupation (ground g). See grounds to oppose renewal. On the no-fault grounds the tenant is entitled to compensation of one or two times the rateable value, the higher figure applying where they have been in occupation for 14 years or more.
Interim rent and getting it right
While the renewal runs its course, an interim rent can apply. The 1954 Act timetable is strict and getting a notice wrong can be costly, so take advice from a solicitor before serving or responding to any notice. Contracting out is covered in contracting out of the 1954 Act.
Can my tenant force me to grant a new lease?
If the lease has 1954 Act protection, the tenant has a right to renew unless you oppose on one of the statutory grounds, such as redevelopment or your own occupation.
Is compensation payable if I refuse renewal?
On the no-fault grounds, the tenant is entitled to compensation of one times the rateable value, or two times if they have occupied for 14 years or more.