Security of tenure - landlords & tenants

Landlords requiring automatic possession of commercial property

Landlords wanting automatic possession of the commercial property, without fear of tenants claiming extended possession and occupation, for example, if they know at the outset that in the future they may want to occupy, or redevelop, or change the use of the premises etc acts that they cannot do with a tenant in possession, then they will want to see that there is no security of tenure granted to its tenant, and that the protection of the Landlord & Tenant Act 1954 is excluded and of no effect.

Businesses requiring security of tenure

Many businesses in particularly in the manufacturing industry often invest in the premises they are operating from with the installation of machinery. For businesses in the retail industry the trading address of the business may be significant to goodwill. If the option to remain in the premises on expiry of the lease is crucial, then a lease drafted with the protection of the Landlord & Tenant Act 1954 will be vital in helping to provide security of tenure. The security of tenure provides the tenant with the automatic right to remain in possession of leasehold business premises after the lease term reaches its natural end. If the landlord or the tenant is seeking to end the lease, this can only be done if a notice to quit is issued. There are limited circumstances in which a landlord can issue a notice.

Security of tenure excluded from a lease

If the security of tenure is excluded from the lease at the outset the tenant has no right to remain in the property. Tenants who do not see the commercial property as critical to their business may be willing to accept this exclusion. Exclusion regarding security of tenure can often lead to more beneficial rental rates as properties being leased without this are typically seen as less attractive to many tenants. Landlords who are seeking to take back their property at the end of the lease should consider making this exclusion.

Removing a tenant if exclusion of the act is not made

If exclusion of the act is not made and security of tenure exists the landlord can only seek to remove the tenant at the lease end date by serving a notice to terminate, of at lease 6 months warning, and then only  if they can demonstrate that the:

• Tenant has failed to comply with repair and maintenance obligations
• Tenant is persistently late with rent
• Tenant is in substantial breach of their obligations 
• Landlord has offered and is willing to provide or secure the provision of suitable alternative accommodation for the tenant’s requirements
• The tenant is a sub tenant of part of the landlord's building and the landlord could get more rent by leasing the whole of the building rather than part.
• Landlord intends to demolish or reconstruct the whole or any part and could not reasonably do so without obtaining possession 
• Landlord intends to occupy 

The notice must

• Set out the ground(s) on which the landlord is relying on to oppose a new tenancy
• Specify a date for termination of the current tenancy

It is vital that landlords and tenants seek advice before taking out a lease and give consideration to what they want to happen at the end of the lease with regards to occupancy. Our commercial lease solicitors are also able to advise both landlords and tenants if they face difficulties when the lease nears expiry. Call us today on 01616 966 229 or complete our online enquiry form to see how we could assist you.