Landlord and Tenant Act 1954
Security of tenure for business tenants
In shortSecurity of tenure means a business tenancy does not end on its contractual expiry date: it continues on the same terms under section 24 until ended by a statutory notice, and the tenant has the right to apply for a new tenancy on renewal.
Key facts
- Statutory test
- Occupation by the tenant for business purposes (s.23)
- Continuation
- Automatic under s.24 after contractual expiry
- Excluded
- Contracted-out leases, tenancies at will, terms of 6 months or less
- Lost by
- Ceasing to occupy, vacating at expiry, or a s.27 notice
The section 23 test
Protection turns on two things: a tenancy, and occupation by the tenant for the purposes of a business carried on by the tenant. 'Business' is defined broadly and includes a trade, profession or employment, and any activity carried on by a body of persons. The question is factual — what actually happens at the premises.
Occupation must be the tenant's own. In Graysim Holdings v P&O the intermediate landlord of a market hall lost protection over units occupied by sub-tenants: for the same space, occupation is not generally shared. A tenant who sub-lets the whole normally hands the renewal rights to the sub-tenant.
The continuation tenancy
Where Part II applies, section 24 keeps the tenancy alive after the contractual term ends, on the same terms and at the same rent, until it is ended in a way the Act permits. The tenant is not a trespasser and should keep paying rent and complying with the covenants. Either party can apply for an interim rent to adjust the rent during this period.
How protection is lost
Protection is fragile in four ways. The lease may have been contracted out under section 38A before it was granted. The tenant may stop occupying for business purposes, in which case the section 23 test fails. The tenant may vacate on or before the contractual expiry date, which ends the tenancy without more. Or the tenant may serve a section 27 notice, or miss the deadline for a court application after a section 25 notice or section 26 request.
Temporary absence does not automatically destroy protection. In Bacchiocchi v Academic Agency a short closure connected with the business did not break occupation — but keep evidence of the business reason for any period of non-trading.
- Valid contracting out under s.38A before grant
- Ceasing business occupation of the premises
- Vacating on or before the contractual expiry date
- Serving a s.27 notice to quit the continuation tenancy
- Missing the deadline to apply to court
Common questions
Do I still have security of tenure after my lease has expired?
Yes, if Part II applies and you remain in business occupation. The tenancy continues under section 24 until it is ended by a section 25 notice, a section 26 request or one of the other statutory routes.
Does sub-letting affect security of tenure?
Sub-letting the whole normally means you no longer occupy, so protection over the sub-let part passes to the sub-tenant. Sub-letting part usually leaves you protected over the part you still occupy.
Is a licence protected?
No, but the label is not decisive. If the arrangement grants exclusive possession for a term at a rent, a court may find a tenancy despite the document calling it a licence.
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.