One of the key differences between residential and commercial leases is the automatic security of tenure that a commercial lease provides. This is provided under Part 2 of the Landlord and Tenant Act 1954, and protects businesses by granting rights to remain on the premises after the end of the lease term.
The law surrounding this area can be complicated, and it is advisable to seek professional legal advice when exploring this area.
At Seatons, our team of highly trained legal advisors have a wealth of experience in commercial landlord and tenant matters, and provide clear, easy to understand legal advice at low sensible fees. For more information, feel free to give us a call on 01536 276300.
Landlord and Tenant Act 1954
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 being agricultural leases and short term leases.
The statutory protection grants a business tenant Security of Tenure. Where a business tenant has security of tenure, it means that the business tenancy will automatically continue at the expiry of the lease term on the same terms, until it is terminated in one of the ways specified in the Act. In addition, the business tenant can apply to court for a new tenancy and the landlord may only oppose on certain statutory grounds (including paying compensation by the landlord to the tenant if the tenant’s application is unsuccessful). A renewed tenancy will also benefit from security of tenure.
Many leases contract out of the Landlord and Tenant Act 1954 meaning that the tenant’s right are significantly reduced. If a landlord insists on opting out of the Landlord and Tenancy Act 1954, the tenant must seek legal advice and sign a declaration that they have been advised on the effects of this.
It is possible to contract out of the security of tenure rights granted by the Landlord and Tenant Act 1954. In order to do so however, the tenant must be made fully aware of the implications of doing so and be given plenty of notice beforehand.
The landlord must serve a notice on the tenant in a prescribed form and the tenant must sign a declaration that it has received notice and accepts the consequence of the agreement to contract out. If the notice is served within the 14 days prior to the grant of the tenancy, the tenant must make a statutory declaration which takes place before an independent solicitor. The purpose of this is to reaffirm to the prospective tenant, the potential dangers of contracting out of these provisions. The lease must also contain reference to the exclusion agreement, the notice and the declaration
Commercial Property Specialists In Corby & Kettering
Hello, I am Gemma McKimmie and I am the Head of Seatons Solicitors Commercial Property Department. We aim to provide our clients with an outstanding legal service.
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