Property Disputes - Questions and Answers - Spring 2018

Q. I own commercial premises and I have a tenant who occupies the site without a written agreement. He pays rent monthly. I have been told that he has a protected business tenancy and that it is a periodic tenancy.  How do I go about terminating the existing tenancy?
A. You will need to serve a Notice to Quit and also a Notice under Section 25 of the Landlord and Tenant Act 1954.  The minimum notice period for a Section 25 Notice is six months.  Be aware that the Notice to Quit must expire on the last day of a period.  If rent has been paid monthly, it is likely that the tenancy will be a monthly periodic tenancy.  In order to work out the last day of a period, you need to look at when the tenant went into occupation and the day of each month when the rent payments are made.  If you are not sure precisely when the occupation commenced, it is the rent payment dates that are commonly used to calculate the start date and the end date of each monthly period. So if rent is paid on the 10th, the last day of a period will be the 9th.
Q. My tenant has been late paying the rent.  It is a commercial lease.  There is nothing in the lease about charging interest.  Am I able to charge interest on the late payments?
A. If the lease is silent on the question of interest, then assuming both you and your tenant are businesses, you will have to try to rely upon the Late Payment of Commercial Debts (Interest) Act 1998 to claim statutory interest.
The position is not entirely satisfactory because this particular Act applies to contracts for the supply of goods and services.  Does the grant of a lease amount to the “supply of services”?  My view is that when granting a lease, you are not supplying a service and that the tenant would therefore have a reasonable case for arguing that it is not liable to pay interest under this Act. 

This article features in the Hughes Paddison Spring 2018 Property Disputes Update. You can view a summary of the full content of the newsletter and download a copy here.