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.
Who applies to the court, and by when?
Either party can apply, but the application must be made before the date specified in the section 25 or section 26 notice unless both sides agree in writing to extend it. Missing that date can end the right to a new lease, so the deadline is diarised the moment a notice arrives.
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.comRelated guides
- Section 25 NoticeReceived 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 NoticeA 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 RenewalHow commercial lease renewal works for business tenants: protected and contracted-out tenancies, notices, new rent, new terms and interim rent.
- Interim RentInterim rent under Sections 24A to 24D of the 1954 Act: who can apply, when it starts, how it is valued and when it differs from the new lease rent.
- Commercial Tenants' RightsWhat rights a commercial tenant has: security of tenure, renewal, repair limits, alterations, assignment, forfeiture and compensation.