Flashcards in Lease Renewals Deck (84)
What tenancies/ business occupations does the LTA 1954 apply to (Section 23)?
1. It is a tenancy
2. Premises must be used for a business
3. Tenant must occupy at least part of the premises
4. Occupation for at least 6m (I.e not a license)
5. Not an exempted or excluded tenancy (e.g. TAW/ service tenancy)
6. Competent LL (freeholder/ superior tenant with more than 14 months to run)
What do sections 23-28 of LTA 1954 relate to?
(23) Tenancies to which Part 2 relates to
(24) Continuation of Tenancies and Grant of New Tenancies
(24A) Interim Rent
(25) Termination of Tenancy by LL
(26) T’s Request for New Tenancy
(27) Termination of Tenancy by T for a Fixed Term
(28) Renewal of Tenancies by Agreement
Under section 25 of LTA 54’, what is a ‘friendly’ notice?
A notice by the LL to terminate the existing lease, stating new proposed terms and rent (opening negotiation)
Under section 25 of LTA 54’, what is a ‘hostile’ notice?
A notice by LL terminating existing lease and opposing the grant of a new lease under one or more of the section 30 grounds
What is the definition of occupation?
- not necessarily continuous
- not necessarily occupied by the tenant
What does Section 24 require regarding continuation of business tenancies to which the Act applies?
A business tenancy to which the Act applies does not expire by effluxion of time, but instead only when one party serves a notice
Under Section 24, what happens when no notice is served?
T enters into a 'holding over' period until either LL/T serves notice to terminate the lease in accordance with the provisions of the Act
What is an Interim Rent?
Rent payable by a business tenant under the Act during the holding over period (during their occupation between the termination of the former tenancy, and the commencement of the new lease)
What is the 'Appropriate Date'?
The date from which the interim rent is paid
Is there always an Interim Rent payable?
LL/T can apply for an interim rent after a Section 25/26 notice has been served. If no notice has been served, there can be no interim rent.
Are applications for interim rents mutually exclusive?
No. Once one party has applied for an interim rent, the other party cannot.
What is the earliest/latest date to apply for an interim rent?
Earliest date - date of s.25/26 notice
Latest date - 6m after termination of tenancy
Has it always been the case that the tenant can apply for an interim rent?
No, previously only LL could apply for an interim rent
What is the basis for the interim rent?
Assumes an annual tenancy and a market rent (expected to be the new rent).
Is the interim rent always just the Market Rent?
There can be adjustments to the interim rent payable if market conditions change significantly over the period that the interim rent is paid.
How is the interim rent determined?
Typically the interim rent is the new agreed rent (usually Market Rent), although in some cases PACT proceedings can be used to determine the rent.
What are the timings for serving a Section 25 notice?
LL can serve a s.25 only between 6-12 months before the proposed date of termination of the tenancy
Does a s.25 notice have to be served on a quarter day?
What must a s.25 notice contain/what are the requirements?
- Given by a COMPETENT LL, to T
- Relate to the ENTIRE DEMISE comprised in the tenancy
- Be in the PRESCRIBED FORM, informing T of their rights
1. Name/Address of LL/T
2. Property Address
3. Proposed Termination Date
4. Confirmation of whether new lease is to be granted or opposed
5. Date of Response Required
6. (Friendly) State Proposed Terms/Rent of New Lease
6. (Hostile) State Grounds for Opposition
Are there set time limits?
These are usually set within the notice but can be extended by agreement between parties (max. extension of 15 years can be granted by the court)
Can you undertake a Lease Renewal negotiation past the date specified in s.25/26 notice (i.e. 6-12m)?
Yes however T loses their security of tenure, unless:
1. There is a new lease in place
2. Either party has applied to the court
3. The parties have agreed in writing to an extension of their statutory period ("stay")
What are the timings for serving a Section 26 notice?
6-12 months before termination of tenancy
What are the requirements for a s.26 notice?
- Must be in prescribed form
- Must state T's proposed new lease terms (incl. rent)
Can LL oppose T's request for a new tenancy?
Yes - LL must serve a valid COUNTER NOTICE, within 2 MONTHS of receiving a s.26 notice specifying the GROUNDS FOR OPPOSITION within Section 30
What is a Section 27 notice?
Tenant's request to terminate the tenancy. T must serve notice to terminate tenancy no later than 3m before the contractual LEX (to ensure tenancy is not automatically renewed - subject to s.24).
If the lease has already expired and T remains in occupation (holding over), T must serve notice to terminate the tenancy giving at least 3m notice.
If T serves a s.27 notice, can they then serve a s.26?
No - once a s.27 is served, T loses their security of tenure and has no right to remain in occupation
Under s.24, business tenancies to which the Act applies do not expire by effluxion of time, but on service of notices. If T vacates prior to LEX, must a notice be served to terminate the tenancy?
No - no notice needs to be served if the property is vacant.
Under Section 30, what are the 7 grounds for opposition to grant a new tenancy?
(a) Breach of repairing covenant
(b) Persistent delay in paying rent
(c) Other substantial breach
(d) LL can provide suitable alternative accommodation
(e) Uneconomic subdivision
Under which of the Section 30 grounds for opposition, is compensation payable to the tenant (S.37)?
Grounds e, f, g