For landlords
Part II of the Landlord and Tenant Act 1954 gives the tenant security of tenure — but it gives the landlord the timetable, the grounds of opposition and, on every new letting, the ability to exclude the Act altogether. The advantage lies in preparing early: notices served on your own clock, grounds proved on evidence, and compensation priced before you decide to fight.
Every ground of opposition in s.30 has to be proved at the hearing, and the no-fault grounds (f) and (g) are proved by a settled, unconditional intention supported by money, consents and a firm commitment to the court. A landlord who starts assembling that evidence when the notice is drafted almost always beats one who starts when proceedings are issued.
A s.25 notice fixes the timetable and, with it, the date the new rent is valued and the earliest date interim rent can run. In a rising market a landlord who serves early captures the uplift; a landlord who waits hands that choice to the tenant's s.26 request.
A properly executed s.38A exclusion agreement removes security of tenure and compensation entirely. The warning notice must be served before the tenant commits, and the declaration (or statutory declaration where there are fewer than 14 days) must be made in the prescribed form — get the sequence right and the whole renewal risk disappears.
Under the O'May principle the new tenancy starts from the terms of the current lease and the party seeking change carries the burden of justifying it as fair and reasonable. Landlords who want modernised terms — service charge, alienation, break rights, repairing obligations — must build a case for each, and price the concession they are offering in return.
Only a ground stated in the notice can be relied on at trial. Discretionary grounds leave the court free to grant a new tenancy anyway.
A record of substantial disrepair caused by the tenant's failure to repair.
A documented pattern of late payment, not a single default.
Contemporaneous evidence of substantial breach or misuse.
A firm offer of accommodation suitable for the tenant's business on reasonable terms.
Rarely used: the aggregate of sub-let rents must be substantially less than the rent obtainable on a letting of the whole.
A firm, settled and unconditional intention with funding, consents and a real prospect of implementation, and works that need possession.
A genuine intention to occupy for its own business or as a residence, and no purchase of the interest within the previous 5 years.
The edge: The s.25 notice lets the landlord choose the termination date — and therefore the rent valuation date, the start of interim rent and the length of the process. It also denies the tenant the initiative of a s.26 request.
The clock
A s.25 notice must specify a date not more than 12 and not less than 6 months after it is given, and no earlier than the date the tenancy could have been ended at common law. Once a tenant has served a valid s.26 request, it is too late to serve a s.25 notice at all.
Watch out
A defective s.25 notice — wrong form, wrong date, wrong ground, wrong landlord, wrong tenant — usually cannot be cured by a second notice inside the window. You lose 6 to 12 months and often the market movement with it. And you cannot rely at trial on a ground you did not state in the notice.
The edge: Ground (f) is the landlord's strongest route to possession, but it turns entirely on evidence of a firm and settled intention to demolish or reconstruct on the termination date, and of a real prospect of carrying it out.
The clock
Intention is tested at the date of the hearing, not the date of the notice — but the works must be intended for 'on the termination of the current tenancy', so the programme has to be credible for that date.
Watch out
A scheme designed only to remove the tenant risks failing as an artificial device, and s.31A allows the tenant to defeat ground (f) where the works could reasonably be done while the tenant stays in occupation, or with a lease of an economically separable part.
The edge: Where the landlord genuinely intends to occupy the holding for its own business or as a residence, ground (g) delivers possession without a redevelopment scheme.
The clock
Ground (g) is unavailable if the landlord's interest was purchased or created within the five years ending with the termination date and the property has been let on business tenancies throughout that period.
Watch out
The five-year bar cannot be engineered away by transfers within a group, and a change of intended occupier after the notice can undermine the whole case. Compensation under s.37 is payable on ground (g) whether you win or the tenant simply leaves.
The edge: Grounds (a) disrepair, (b) persistent late payment and (c) other substantial breaches are discretionary — the court decides whether the tenant 'ought not' to be granted a new tenancy. A contemporaneous paper trail is what converts irritation into a ground.
The clock
There is no window for the breach itself, but the conduct relied on must be pleaded in the s.25 notice or counter-notice, so the record must exist before the notice is drafted.
Watch out
The court can grant a new tenancy despite proven breaches, and may instead reflect the tenant's conduct in the rent or terms. Fault grounds also carry no compensation, which makes tenants fight them hard.
The edge: Interim rent is a separate figure from the new rent. Where the passing rent is below market, the landlord who applies promptly recovers the uplift for the whole continuation period instead of subsidising a slow renewal.
The clock
An application can be made once a s.25 notice or s.26 request exists, and no later than six months after the tenancy ends. Interim rent normally runs from the earliest date that could have been specified in that notice or request.
Watch out
Interim rent can be lower than the passing rent in a falling market — applying reflexively can cut your own income. Model both outcomes before serving.
The edge: Rent under s.34 is valued on the terms of the tenancy as determined under s.35, so each term you secure feeds the rent. Landlords who negotiate duration, break rights and repairing obligations first negotiate the rent from a stronger base.
The clock
Terms and rent are determined in the proceedings; the new tenancy takes effect three months after the proceedings are finally disposed of under s.64, so the timetable itself has a rental value.
Watch out
O'May puts the burden on the party seeking change. Overreaching on the terms is the classic way landlords lose the rent argument too, because the tenant's valuer prices the risk you are trying to transfer.
The edge: A s.40 notice compels the tenant to disclose occupation, sub-tenancies and derivative interests. That tells you whether the tenant is even protected, whether a sub-tenant is the real renewing party, and who the competent landlord is.
The clock
A s.40 request may be served in the two years ending with the earliest date the tenancy could be brought to an end, and the recipient must reply within one month, with a continuing duty to correct changes for six months.
Watch out
A s.40 request served outside the two-year window is invalid, and the information you receive can cut both ways — it may confirm the tenant is fully protected and force you to plan for renewal rather than possession.
The edge: Compensation under s.37 is the real cost of a no-fault possession, and it is predictable. Knowing the number early tells you whether opposing is cheaper than a negotiated surrender.
The clock
Compensation is payable where the tenant quits on a no-fault ground — (e), (f) or (g) — and is calculated on the rateable value of the holding, doubled where the business has been carried on in the premises for 14 years or more.
Watch out
Compensation cannot be avoided by pleading a fault ground you cannot prove: if the no-fault ground is the one that succeeds, the payment follows. Rateable-value changes can move the figure materially, so re-check it before the hearing.
The edge: A valid s.38A agreement excludes security of tenure and compensation, so the renewal risk never arises. This is the single highest-value tactic available to a landlord, and it is entirely procedural.
The clock
The warning notice must be served on the tenant before the tenant becomes contractually bound. Where that is 14 days or more before commitment, a simple declaration suffices; where it is less than 14 days, a statutory declaration before an independent solicitor is required.
Watch out
A missed or late warning notice, or a declaration in the wrong form, leaves the tenancy fully protected — and you will not discover it until the tenant claims a renewal. Court approval is no longer available to cure it.
The edge: Either party can apply to court, and whoever manages the timetable manages the cost of delay. Under s.64 the new tenancy does not begin until three months after the proceedings are finally disposed of — a tail worth money in a rising market and a liability in a falling one.
The clock
An application must be made before the date specified in the s.25 notice or s.26 request unless the parties agree an extension in writing before that date expires. Extensions can be agreed repeatedly, but each must be in place before the current deadline passes.
Watch out
Missing the application deadline without a written extension ends the tenancy on the specified date with no new tenancy and no claim — which is occasionally a windfall, but far more often destroys a renewal you wanted.
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A section 25 notice must specify a termination date not less than 6 and not more than 12 months after the notice is given, and not earlier than the date the tenancy could have been ended at common law.
Serving a section 25 notice first lets the landlord choose the termination date, which fixes the valuation date for the new rent and the timetable for any court application — useful when market rents are rising or a redevelopment programme needs certainty.
The landlord must show a firm and settled intention to demolish or reconstruct a substantial part of the premises on termination, plus a reasonable prospect of carrying it out. S Franses v Cavendish Hotel confirmed that an intention conditional on defeating the renewal will not do.
Yes. Either party may apply under section 24A for interim rent covering the holding-over period, so a landlord facing an out-of-date passing rent should apply rather than let the old rent run.
Under section 38A the landlord must serve the prescribed health warning notice before the tenant becomes contractually bound, and the tenant must sign the simple or statutory declaration — 14 clear days before, or a statutory declaration if less.
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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.