Leasehold legal issues

Landlord and Tenant Act 1954

Landlord and Tenant Act 1954

Sections 24 to 28 of the Landlord and Tenant Act 1954 give tenants of non-residential premises a number of important rights, unless the provisions are excluded from the tenancy by a valid agreement.

  • The rights can be summarised as: statutory continuation of the tenancy on the same terms at the end of the contractually agreed period of the tenancy; a right to apply to the Court for a new tenancy if the landlord serves a statutory notice requiring the tenant to do so; a right to statutory compensation based on rateable value if the landlord objects to the grant of a new lease on specific grounds (excluding those grounds based on tenant default).
  • The parties can exclude sections 24 to 28 by agreement as long as a fairly complex notification and declaration procedure is followed, but only if the tenancy is  fixed term rather than a periodic..  This is commonly known as “contracting out”.
  • In order to contract out, the landlord must serve on the tenant a notice in statutory form briefly setting out the 1954 Act rights and  the fact that they will be excluded from the tenancy.  The tenant must make a declaration (or statutory declaration if the lease is to be granted less than 14 days after service of the notice) in the prescribed statutory forms stating that the tenant has received, read and accepts the notice. The lease must contain an agreement excluding the operation of sections 24 to 28 of the Landlord and Tenant Act 1954  and refer to the service of the notice and making of the declaration.
  • The effect of excluding the provisions of the 1954 Act are that the tenant has no right to remain in the property at the end of the lease and the landlord is entirely free to offer a new lease on whatever terms the landlord thinks appropriate, or can decline to grant a new lease at all.
    If the lease is not contracted out, and therefore within sections 24 to 28, the tenant can stay in the premises after the contractual end date in the lease  under the same terms and conditions until the expiry of a notice served either by the landlord or the tenant, or until proceedings for the grant of a new lease have been concluded.