Business tenancies are protected under the Landlord and Tenant Act 1954. The protection applies to business tenancies granted to most types of business but there are some exceptions, the most significant is agricultural leases and short term leases.
The statutory protection prevents a business tenancy from being terminated in any way other than in accordance with the Act. The exceptions include a tenant or landlord can bring the tenancy to end by way of serving a notice to quit, so long as that is provided for under the lease, surrender of the tenancy and the landlord can forfeit the lease if it is permitted to do so under the lease (most notably if the tenant breaches an obligation). If there is a fixed term lease for the business tenancy and this has come to an end, the tenancy will continue on the same terms included within the lease.
Business tenancies can be terminated in the above ways but also by the landlord serving a Section 25 Notice or a tenant serving a Section 26 notice.
If the landlord requests the business tenancy to end, he must serve a Section 25 Notice on the tenant stating when the tenancy will end. There are formalities to a Section 25 Notice:
1. It must be in writing, the correct form and signed by the landlord
2. It must be given within a specified time frame before the termination
3. It must specify whether the landlord would oppose an application from the tenant requiring a new tenancy with reasons.
If the tenant wants to remain in the premises, he can serve a Section 26 Notice on the landlord. There are formalities to the Section 26 Notice:
1. It must be in writing, the correct form and signed by the tenant
2. It must give a specified time frame to begin the new tenancy.
The tenant can terminate the tenancy. If it is a fixed term tenancy he can give the landlord notice in writing 3 months before the contractual end. If the tenant has remained in the business premises at the end of the fixed term, he can terminate the tenancy by giving the landlord notice in writing at least 3 months in advance.
For various reasons, the landlord may not want to grant a new tenancy to the tenant. However, under the protection of the Act, the landlord can only successfully oppose a new tenancy if it incorporates one of the following;
1. Premises are in disrepair
2. Persistent delay in paying rent
3. Substantial breach of covenant
4. Landlord has offered reasonable alternative accommodation
5. Landlord wants to let whole of premises and tenant was a sub-tenant
6. Landlord intends to demolish premises or complete substantial construction work
7. Landlord intends to occupy the premises himself
The law on business tenancies is extremely complicated and if there is a dispute, it is highly recommended to seek specialist legal advice.