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Security of Tenure - A Brief Guide to Sections 24 to 28
One of the most common, but important, references to statutory legislation within commercial Leases is in respect of the exclusion of Sections 24 to 28 of the Landlord & Tenant Act 1954. It is extremely common to see reference to the exclusion of these provisions within a commercial Lease. Many first time commercial Tenants will ask the question “what is the effect of the exclusion of these provisions?”
To appreciate the effect of these provisions, it is important to note that generally speaking, all commercial Leases benefit from security of tenure, which simply means that a business tenancy will not automatically come to an end at the expiry of a fixed term and a Tenant has an automatic right of renewal at the end of the term, to which a Landlord can only oppose on certain grounds, a common example would be the Tenant constantly delaying paying rent.
Most Landlords will want to exclude the statutory provisions from a Lease for obvious reasons. A Landlord will argue that it is impossible to predict whether in the future they will still want the current Tenant in occupation of the property. For a Tenant, however, it is a very convenient statutory provision to rely on, as it means that at the end of their term, there is no particular rush to find alternative premises. Exclusion of Sections 24 to 28 of the Landlord & Tenant Act will need to be contained explicitly within the Lease and the Tenant will need to be served a notice by the Landlord setting out the effect of the exclusion of those provisions. The Tenant, or somebody authorised on their behalf, will then have to sign a Statutory Declaration to say that they are aware of the effect of the exclusion of the provisions of Sections 24 to 28 of the Landlord & Tenant Act 1954.
As it is common that Leases are drafted by the Landlord’s representatives, it is unsurprising that Sections 24 to 28 get excluded from commercial leases so often. Nonetheless, if you are Tenant, it is worth considering the effect of these provisions very carefully.
The information contained on this page has been prepared for the purpose of this blog/article only. The content should not be regarded at any time as a substitute for taking legal advice.