The Landlord and Tenant Act 1954, LTA 1954, governs the rights and obligations of landlords and tenants of properties that are occupied for business purposes.
The correct requirements of the LTA 1954 must be adhered to otherwise the provisions are unlikely to be enforceable, regardless if you are:
- a landlord wishing to lease out a commercial property and have it redeveloped after some time; or
- a tenant starting up a business and need to have a sense of security to remain in the property you’re leasing for some time as you build up your reputation and goodwill.
Commercial property solicitors from Sanders Witherspoon specifically have considerable experience to make sure that everything is being dealt with, inside and outside of TLA 1954, effectively and efficiently for your best interest.
Generally, a tenant has a statutory right to renew its tenancy at the end of the term following LTA 1954, which is known as a protected tenancy.
A protected tenancy will not end once the term of the lease has expired but will continue under the terms of the expired lease until it is terminated or renewed by the parties. The Heads of Terms agreed upon between a landlord and a tenant in their negotiation will determine if LTA 1945 will apply.
The landlord, on the other hand, is allowed to refuse a renewal on certain grounds including but not limited to owner-occupation or redevelopment.
Provisions of the LTA 1954 may be excluded only if the tenancy has been documented and recorded rightfully.
Parties involved in creating a contract without regards to the LTA 1954 on an excluded tenancy essentially agree that the tenant:
- must leave the property at the end of the lease unless the landlord offers a new lease;
- has no right to remain in the property once the lease has expired;
- has no right to ask the court to fix the rent if the landlord offers another lease; and
- has no right to compensation from the landlord on leaving the property at the end of the lease.
There is no right of renewal at the end of the tenancy and the lease will not continue if it contracts out of the LTA 1954—during this instance, the landlord also does not need to notify the tenant. Renewal of the lease, then, will be subject to discussion and negotiation between parties.
However, if in case the landlord continued to receive payments of rent from the tenant after the expiry of the lease (and other similar situations), then it would still gain the protection of the LTA 1954 in some circumstances.
What to do to exclude LTA 1954?
The LTA 1954 does not require a landlord to justify within the body of the lease why it is to be excluded. It all depends on what the parties have agreed between themselves.
Once it has been agreed that the LTA 1954 should be excluded, various provisions must be satisfied before it can effectively be excluded. For example, the lease would need to be for a fixed term rather than year to year.
A Statutory Declaration Procedure or Advanced Notice Procedure needs to be carried out. There are warning notices and prescribed time limits in these procedures that need to be strictly adhered to before completion.