What is security of tenure?

The statutory right of a business tenant to remain in occupation after the lease expires and to be granted a new tenancy, unless the landlord establishes a Section 30 ground.

What compensation do I get if the landlord redevelops?

Where renewal is refused on grounds (e), (f) or (g), compensation is the rateable value of the holding, doubled where the tenant and predecessors have occupied for fourteen years or more.

Does the 1954 Act apply in Scotland or Ireland?

No. Scotland and Northern Ireland and the Republic of Ireland each have their own regimes; I act across all four jurisdictions and advise on the applicable one.

How do I know if my lease is protected?

Check whether it was contracted out of sections 24 to 28. If there is no exclusion notice and declaration, and you occupy for business purposes, the lease is almost certainly protected.

What is interim rent?

The rent payable between the end of the old term and the start of the new lease. It is usually assessed at the new lease rent, but can differ where market movement has been significant.

Can I stay in occupation after the contractual expiry date?

Yes. A protected tenancy continues under section 24 until it is ended by a valid notice or a new lease is granted.

What if I miss a statutory deadline?

Deadlines under the Act are strict and missing one can end security of tenure. Take advice the day any notice arrives.

Landlord and Tenant Act 1954 Lease Renewal

Part II of the Landlord and Tenant Act 1954 gives business tenants in England and Wales security of tenure: the right to stay in occupation when the contractual term ends, and the right to a new lease unless the landlord can prove a statutory ground of opposition.

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Which tenancies are protected

The Act applies where premises are occupied by the tenant for the purposes of a business, the tenancy is not excluded by agreement, and it is not one of the excepted categories such as a tenancy at will or a term of six months or less without renewal rights.

The key sections

Section 24 — the tenancy continues after the contractual expiry date until ended under the Act
Section 25 — the landlord's notice, either proposing new terms or opposing renewal
Section 26 — the tenant's request for a new tenancy
Section 27 — the tenant's notice to quit and bring the tenancy to an end
Section 30 — the seven grounds on which a landlord may oppose renewal
Sections 24A to 24D — interim rent for the period between expiry and the new lease
Section 37 — compensation where renewal is refused on the no-fault grounds (e) to (g)

Valuation under Section 34

The new rent is the open market rent, disregarding the tenant's occupation, any goodwill the tenant has generated and, in most cases, improvements the tenant carried out otherwise than under an obligation to the landlord. Those disregards are frequently worth a substantial part of the rent and are routinely overlooked in unrepresented renewals.

Common questions

What is security of tenure?: The statutory right of a business tenant to remain in occupation after the lease expires and to be granted a new tenancy, unless the landlord establishes a Section 30 ground.
What compensation do I get if the landlord redevelops?: Where renewal is refused on grounds (e), (f) or (g), compensation is the rateable value of the holding, doubled where the tenant and predecessors have occupied for fourteen years or more.
Does the 1954 Act apply in Scotland or Ireland?: No. Scotland and Northern Ireland and the Republic of Ireland each have their own regimes; I act across all four jurisdictions and advise on the applicable one.
How do I know if my lease is protected?: Check whether it was contracted out of sections 24 to 28. If there is no exclusion notice and declaration, and you occupy for business purposes, the lease is almost certainly protected.
What is interim rent?: The rent payable between the end of the old term and the start of the new lease. It is usually assessed at the new lease rent, but can differ where market movement has been significant.
Can I stay in occupation after the contractual expiry date?: Yes. A protected tenancy continues under section 24 until it is ended by a valid notice or a new lease is granted.
What if I miss a statutory deadline?: Deadlines under the Act are strict and missing one can end security of tenure. Take advice the day any notice arrives.

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Chris McGarrigle MRICS, chartered since 1989, acting for occupiers across England, Scotland, Northern Ireland and Ireland.

chris@mcgarrigle.com

Related guides

Section 25 Notice
Received a Section 25 notice? What it means, the difference between friendly and hostile notices, the deadlines that bind you and how to respond.
Section 26 Notice
A Section 26 request lets the tenant start the 1954 Act renewal and choose the timing. When serving first helps, when it backfires, and the rules.
Commercial Lease Renewal
How commercial lease renewal works for business tenants: protected and contracted-out tenancies, notices, new rent, new terms and interim rent.