Landlord and Tenant Act 1954
Interim rent explained
In shortInterim rent is the rent payable during the continuation tenancy while renewal is under way; either party may apply once a section 25 notice or section 26 request has been served, and where the renewal is unopposed and of the whole, it is usually the same as the new lease rent under section 24C.
Key facts
- Who applies
- Landlord or tenant
- When
- After a s.25 notice or s.26 request, and no later than six months after the tenancy ends
- Start date
- The earliest date that could have been specified in the notice or request
- Default rule
- s.24C — usually equals the new tenancy rent
- Other cases
- s.24D — market rent for a yearly tenancy, often discounted
Why interim rent exists
Without it, the old rent would continue throughout the continuation tenancy, so whichever party benefited from the passing rent would have every reason to drag the renewal out. Interim rent removes that incentive by adjusting the rent for the interim period.
How it is calculated
Where the landlord did not oppose renewal and the new tenancy is of the whole of the holding, section 24C applies: the interim rent is normally the same as the rent under the new tenancy, subject to adjustment if the market or the terms have changed substantially in the interim.
In other cases — opposed renewals, or a new tenancy of part — section 24D applies: the rent is what would reasonably be payable on a yearly tenancy of the holding. Because a yearly tenancy is a less valuable interest, that figure is usually below the section 34 rent, which is why the distinction is worth fighting over.
Timing and tactics
An application can be made once a section 25 notice or section 26 request has been served, and must be made no later than six months after the tenancy ends. Interim rent runs from the earliest date that could have been specified in that notice or request — not from the date of the application — so a party sitting on the point loses money.
For a landlord holding a lease at a below-market rent, applying early captures the uplift sooner. For a tenant paying above market, it does the reverse. Either way the application is cheap, and it usually accelerates settlement.
Common questions
Who pays interim rent?
The tenant pays it to the landlord for the continuation period. It may be higher or lower than the passing rent depending on the market.
When does interim rent start?
From the earliest date that could have been specified as the termination date in the section 25 notice or the commencement date in the section 26 request.
Is interim rent always the same as the new rent?
Only where section 24C applies — unopposed renewal of the whole holding. In opposed cases or renewals of part, section 24D applies and the figure is usually lower.
The provisions behind this guide
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General information on business lease renewal under Part II of the Landlord and Tenant Act 1954 in England and Wales. It is not legal advice, and deadlines under the Act are unforgiving — take advice on your own notices and dates before acting.