Landlord and Tenant Act Lease Renewals Solicitors Specialist Legal Advice for Commercial Lease Renewals in Milton Keynes and Nationwide

What is the Landlord and Tenant Act 1954?

The Landlord and Tenant Act 1954 is a key piece of UK legislation that provides security of tenure for business tenants. This means that, unless expressly excluded, tenants have a legal right to renew their commercial lease at the end of the lease term — typically on similar terms, with rent adjusted to reflect current market rates.

This statutory protection gives commercial tenants continuity and peace of mind when investing in premises, branding, and customer relationships. For landlords, it offers a structured process for managing lease renewals or reclaiming possession under certain conditions.

Key Rights Under the Act

• Right to Renew
  Tenants have the right to request a new lease when the original lease ends, unless excluded in the original agreement.
• Market Rent Review
  Renewed leases usually reflect the current open market rent.
• Court Involvement
  If parties cannot agree on lease terms, the tenant can apply to the court for a new lease.
• Strict Notice Periods
  Legal notices must be served correctly and on time — failure to do so can result in losing your rights.

Section 25 and Section 26 Notices: What You Need to Know

Section 26 Notice – Tenant’s Request for Lease Renewal

A commercial tenant who wishes to renew their business lease must serve a Section 26 notice under the Landlord and Tenant Act 1954. This notice:

• Must be served between 6 and 12 months before the lease expiry date
• Should outline the proposed terms for the new lease
• Triggers the formal lease renewal process

Section 25 Notice – Landlord’s Response

A commercial landlord can initiate the lease expiry process by serving a Section 25 notice. This notice:

• Can either agree to lease renewal or oppose it
• Must provide legal grounds for opposition, such as redevelopment plans or repeated tenant breaches
• Requires strict compliance with notice periods and content rules

Grounds for Refusing Lease Renewal

A landlord may legally oppose a lease renewal under the Landlord and Tenant Act 1954 on the following grounds:

Fault-Based Grounds:

• Persistent non-payment of rent
• Breach of other lease obligations

No-Fault Grounds:

• Landlord intends to redevelop the property
• Landlord wishes to occupy the premises themselves

In the case of a no-fault refusal, the tenant may be entitled to statutory compensation, based on the rateable value of the premises.

Negotiating New Commercial Lease Terms

Whether initiated by a Section 25 or 26 notice, once renewal is on the table, the parties must negotiate the new lease terms. These often include:

• Length of the new lease (up to 15 years if determined by the court)
• Market rent
• Break clauses
• Repair and maintenance obligations
• Service charges and rent review clauses

If the landlord and tenant cannot reach agreement, the matter can be referred to the county court, which will impose lease terms that are fair and reflective of current market conditions.