Business Lease Termination and Security of Tenure

Vocabulary and key legal concepts related to business lease termination and security of tenure under the Landlord and Tenant Act 1954, specifically for SQE1 preparation.

Effluxion of time

The process by which a fixed-term lease automatically determines when the contractual term ends, requiring no notice.

Yearly tenancy notice period

At common law, a notice to quit for a yearly tenancy requires at least half a year’s notice expiring at the end of a completed year of the tenancy.

Surrender

A common law termination method where the tenant yields up the lease to the landlord, requiring mutual agreement and completion by deed according to LPA 1925, s 52.

Merger

The opposite of surrender; it occurs where the tenant or a third party acquires the immediate reversion (the landlord's estate), causing the lease to be extinguished.

Security of tenure

Statutory protection under the Landlord and Tenant Act 1954 (Part II) that allows tenants of certain business tenancies to remain in property after the contractual term expires.

Section 23 of the 1954 Act

The provision stating the Act applies to any tenancy where the property is occupied by the tenant for the purposes of a business carried on by them.

Business (1954 Act definition)

Includes a trade, profession, or employment and, for bodies of persons, any activity carried on by them, even if not commercial (e.g., a hospital).

Contracting out procedure

A statutory process involving a landlord's warning notice and a tenant's declaration (or statutory declaration) to exclude the 1954 Act protection before a lease is granted.

Section 24 of the 1954 Act

Specifies that a protected tenancy shall not come to an end unless terminated in accordance with the provisions of Part II of the Act.

Section 25 notice

A notice served by the landlord to terminate a tenancy, which must be served 6 to 12 months before the termination date and indicate if the landlord opposes a renewal.

Section 26 request

A request made by a tenant for a new tenancy, which brings the current tenancy to an end and specifies a proposed commencement date for the new lease.

Section 27 notice

A notice given by a protected tenant providing the landlord with three months’ written notice to terminate a lease.

Section 30 grounds

The seven statutory grounds (a to g) upon which a landlord can oppose the grant of a new tenancy.

Ground (f) of Section 30

A mandatory ground where the landlord intends to demolish, reconstruct, or carry out substantial construction and cannot do so without possession.

Ground (g) of Section 30

A mandatory ground where the landlord intends to occupy the holding for their own business or residence, provided they owned the interest for at least five years.

The 'holding'

The property comprised in the current tenancy, excluding any part not occupied by the tenant (e.g., parts the tenant has underlet).

Discretionary grounds (s 30)

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

Statutory compensation calculation

Equivalent to the rateable value of the holding, or twice the rateable value if the tenant and predecessors in the same business have occupied for at least 14 years.