Seven grounds to oppose a new lease
Landlord's grounds of opposition to a commercial Tenant's renewal lease
Section 30(1) Landlord and Tenant Act 1954 ("LTA 1954") sets out 7 grounds upon which a commercial landlord can oppose the grant of a new lease to a commercial tenant who, provided they satisfy the requirements of Part 2 LTA 1954, would be entitled to a renewal lease at the end of the contractual term.
A landlord must notify the tenant of its opposition to the grant of a new lease by written notice, specifically within
- a section 25 notice served upon a tenant by the landlord which specifies a date terminating the existing lease (which cannot be before the end of the contractual term), informs the tenant that the landlord opposes the grant of a new tenancy, and identifies the landlord's grounds/s for opposing the grant of a new lease.
- in a counter-notice issued by a landlord in response to a tenant's section 26 notice requesting a new lease, the counter-notice setting out the landlord's grounds/s for opposing the grant of a new lease.
Whilst a landlord can specify more than a single ground of opposition in a section 25 notice or counter-notice, once a ground of opposition has been specified, it cannot be changed for an alternative ground or an additional grounds relied upon at a later date. Likewise, it is important to appreciate that if a landlord fails to specify a ground in its section 25 notice opposing the grant of a new lease, or fails to issue a counter-notice within 2 months of the landlord receiving the section 26 request., the landlord will lose the right to oppose the grant of a new lease.
It is important, therefore, that a Landlord who wishes to oppose the grant of a new lease carefully considers and fully familiarises itself with the available grounds of opposition set out at section 30(1) LTA 1954.
The grounds of opposition are as follows
(a) the tenant has obligations in relation to repair and maintenance under the current lease and the property is in disrepair;
(b) there has been a persistent delay in the payment of rent;
(c) the tenant has been/is in breaches of other terms of the existing lease;
(d) the landlord is able to provide suitable alternative accommodation;
(e) the tenancy was created by a sub-letting;
(f) the landlord intends to demolish or reconstruct the property and it is not possible without the landlord recovering possession;
(g) the landlord intends to occupy the property or part of the property for the purposes of its own business or as its residence.
Over the course of the new few articles, I will review the grounds of opposition, highlighting, amongst other issues, those grounds which if relied upon will entitle the tenant to compensation and identifying the grounds which, even if proven, will not mean that a landlord will defeat a tenant's application for a new lease.
If you have any queries arising from this series of articles or wish to discuss a related matter, contact Chris Drinkall, Rollits' Head of Property Dispute Resolution, on 01482 337367 or by email at email@example.com
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.