Lease Termination and Security of Tenure under a Business Lease

Vocabulary flashcards covering methods of lease termination at common law and the statutory framework for business lease security of tenure under the Landlord and Tenant Act 1954.

Effluxion of time

The automatic determination of a fixed-term lease when the contractual term ends, where no notice is required.

Notice to quit

The method of determining periodic tenancies; a yearly tenancy requires at least half a year's notice expiring at the end of a completed year, while other periodic tenancies require one full period’s notice (e.g., one quarter or month).

Surrender

Occurs when the tenant yields up the lease to the landlord who accepts it; it must be achieved by mutual agreement and be executed by deed under LPA $1925$, s $52$.

Merger

The opposite of surrender; occurs when the tenant or a third party acquires both the lease and the immediate reversion, resulting in the lease being extinguished.

Security of tenure

A statutory protection under the Landlord and Tenant Act $1954$ (the $1954$ Act) that allows tenants of certain tenancies to remain in the property after the contractual term has expired.

Business (Section 23 definition)

Defined widely to include a trade, profession, or employment, and in the case of a body of persons, any activity carried on by them, such as a hospital or a tennis club.

Contracted out tenancy

A fixed-term tenancy excluded from the protection of the $1954$ Act by agreement between the landlord and tenant, following a strict statutory notice and declaration procedure.

Section 25 notice

A notice served by the landlord to terminate a business tenancy, specifying a termination date no less than $6$ months and no more than $12$ months after service.

Section 26 request

A request served by a tenant to bring the current tenancy to an end and request a new tenancy to begin on a specified date between $6$ and $12$ months from the request.

Section 27 notice

A written notice served by the tenant giving the landlord $3$ months' prior notice to terminate a fixed-term lease or continuation lease.

Section 30 grounds

The seven statutory grounds (categorized as $a$ through $g$) on which a landlord can oppose the grant of a new business tenancy.

Discretionary grounds

Grounds ($a$), ($b$), ($c$), and ($e$) of Section $30$, where the court decides whether a new lease should be granted based on the tenant's conduct or facts.

Ground (f)

A mandatory ground where the landlord intends to demolish or reconstruct the premises and cannot reasonably do so without obtaining possession.

Ground (g)

A mandatory ground where the landlord intends to occupy the holding for its own business or residence, provided the landlord has owned the interest for at least $5$ years.

The Holding

The property comprised in the current tenancy, excluding any part not occupied by the tenant (e.g., parts let to under-tenants).

Fivend-year rule (Ground g)

Prevents a landlord from relying on Ground ($g$) unless they have owned their interest for at least $5$ years before the ending of the current tenancy.

Compensation (1954 Act calculation)

Entitlement of a tenant refused a lease under no-fault grounds ($e$, $f$, or $g$); amount is the rateable value of the holding, or twice the rateable value if the tenant has occupied for at least $14$ years.

Maximum term of renewal lease

Under the $1954$ Act, the court can fix a term that is reasonable in the circumstances, which cannot exceed $15$ years.