Grounds for opposing a lease renewal

The seven grounds

Ground (a) is failure to repair, (b) persistent delay in paying rent and (c) other substantial breaches of obligation. These are discretionary: even if proved, the court may still grant a new tenancy, and often does where the breach has been remedied.

Ground (d) is the availability of suitable alternative accommodation offered by the landlord. Ground (e) concerns sub-lettings of part where the landlord could obtain a substantially higher rent by letting the whole. Ground (f) is intention to demolish or reconstruct, and ground (g) is intention to occupy the holding for the landlord's own business or as a residence.

• (a) State of repair — discretionary
• (b) Persistent delay in paying rent — discretionary
• (c) Other substantial breaches — discretionary
• (d) Suitable alternative accommodation — mandatory if proved
• (e) Sub-letting of part, higher rent for the whole — mandatory, compensation
• (f) Demolition or reconstruction — mandatory, compensation
• (g) Landlord's own occupation — mandatory, compensation

Proving ground (f): redevelopment

The landlord must show a firm and settled intention, at the date of the hearing, to demolish or reconstruct a substantial part of the holding, and a reasonable prospect of being able to carry the work out. That normally means planning permission or a clear route to it, funding, a contractor and a board resolution or undertaking to the court.

The intention must also be genuine rather than contrived to remove the tenant. Section 31A qualifies the ground: if the work could be done while the tenant remains, or the tenant will accept a lease of an economically separable part, ground (f) fails.

Proving ground (g): own occupation

The landlord must intend to occupy the holding for its own business or as a residence, again with a firm and settled intention at the hearing date. The five-year rule bars the ground where the landlord's interest was purchased or created within five years before the termination date and the tenancy has been protected throughout.

Compensation and tactics

Where the tenancy ends on grounds (e), (f) or (g) alone, section 37 compensation is payable: the rateable value of the holding, doubled where the tenant or its predecessors in the same business have occupied for fourteen years or more. Price that before opposing.

Only grounds stated in the section 25 notice or the section 26 counter-notice can be argued at trial, so grounds must be settled at the notice stage, on the evidence that will exist months later.