Security of Tenure is the legal right a commercial tenant has to continue occupying a property after the lease has expired. Under the Landlord & Tenant Act 1954, if a landlord decides that the lease should not be renewed, the tenant can remain in the property for a limited time. Security of Tenure benefits the tenant when they need the property to continue trading, until they find a new property. It can also allow time for the tenant to wrap things up and move to a new property.
A landlord has the right to take possession or occupy the property, once the lease expires. If the lease agreement does not include a Security of Tenure, the only other option available to help the tenant, is an application to the courts. Landlords can exclude a Security of Tenure from the lease but this poses a risk for the tenant. The landlord will benefit from the exclusion in the sense that they will gain control of the property, once the lease runs out.
The 1954 Act gives the tenant the legal right to continue to occupy and trade in the property, past the lease expiry date, if the lease includes Security of Tenure. The landlord can’t increase the rent or carry out any refurbishment or repair works, whist the tenant is occupying the property. The tenant should be served with a notice to quit the premises and the notice should include grounds for vacating the premises. But then the tenant can also appeal to the courts and get permission to remain in the property.
With the exclusion of Security of Tenure, the landlord could have the upper hand. But the landlord has to give the tenant reasons for vacating the property, once the lease has expired. This can have detrimental consequences for the tenant. It could impact negatively on the business. The tenant will need to be served with a notice to quit and reasons why they should quit the property.
Whether you’re a landlord or tenant, we can help you review or draft a lease agreement which includes or excludes Security of Tenure. If you’ve been served with a notice to vacate the property and this would create problems for your business., please get in touch with us. SG
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