Business Lease – Opposed Renewal

Both a Landlord and a Tenant can oppose the renewal of a lease using the provisions of the Landlord and Tenant Act 1954 as amended by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (RRO).

The process involved is very procedural and strict in relation to time limits and can cause issues when serving the relevant Notice.

If the Landlord issues a Section 25 Notice on the Tenant opposing the renewal of the tenancy, it must be served no more than 12 months and no less than 6 months from the Termination date. Care must be taken that the correct Section 25 Notice has been used.

The Notice to the Tenant must include the fact that the Landlord opposes a renewal of the Lease and that if the Tenant wishes to oppose the Section 25 Notice then he must do so before the Termination date and ask the court to grant a new lease. It must also advise the Tenant that it may ask the court to terminate the tenancy without granting a renewal and that the Landlord may have to pay compensation to the Tenant and that it can challenge the said application.

In order for the courts to grant the Landlords application to oppose the renewal of the lease and therefore dismiss any renewal it must be able to establish one of the grounds contained within Section 30 of the Landlord and Tenant Act 1954. If however, the Landlord cannot establish the grounds contained in section 30 the Courts are likely to grant a new lease.

A Tenant can also ask for the lease to be terminated by serving a Section 26 Notice on the Landlord. Please however, remember that once the Tenant has served the Section 26 Notice it has in effect terminated the original tenancy and immediately before the date specified in the notice the tenancy will come to an end subject to the rules of interim continuation by agreement.

If the Landlord opposes the Tenants request for a new Tenancy it must serve a Notice on the Tenant stating that it is in opposition to the grant of a new lease. This Notice must be served on the Tenant within two months of the Tenants Section 26 Notice to renew being served upon them. The Notice must set out which grounds of Section 30 it relies upon to oppose renewal. The Landlord may then make an application to Court opposing the renewal of the lease, this may only be done so long as the Tenant has not already made an application to Court for the renewal of the lease.

If the Landlord has already served a counter notice as above then the Tenant may not make an application to Court for 2 months after the service of the Section 26 Notice unless the Landlord has already served a Counter Notice.

Jagdeep Sandher, Solicitor

jsandher@astonbond.co.uk