A commercial lease can be ‘contracted-out’ or ‘protected’. If a lease is protected, the Landlord and Tenant Act provides security of tenure ensuring the tenancy cannot come to an end until it is formally terminated.
So as a landlord, how do you bring a protected tenancy to an end?
There are two different ways of doing this, both requiring a section 25 notice to be served on the tenant. The notice can be either ‘hostile’ or ‘non-hostile’ but must be served in a prescribed form and within a prescribed timescale stipulated by the Act, not more than 12 months, or less than six months before the termination date specified in the notice.
This type of notice is served where the landlord opposes the grant of a new lease. For such a notice to be valid, the landlord must set out within the notice any one of the following grounds of opposition:
– premises are in disrepair,
– arrears of rent,
– other breaches of covenant,
– landlord to provide suitable alternative accommodation,
– the tenancy was created by a sub-letting,
– landlord’s intention to redevelop, or
– landlord’s intention to occupy.
A non-hostile notice has the effect of ending a business tenancy and at the same time proposing terms for a new one. The proposed rent and other terms of the new lease must be included in the notice. The notice must also state that if the parties cannot agree on all the terms of the new tenancy, then either party may ask the court to order the grant of a new tenancy and settle the outstanding terms.
It is important that a section 25 notice is validly served and that any grounds for opposition have been considered in detail as to their validity.