#14741 - Protected Tenancies - Property Law and Practice

Protected Tenancies

Tenancies

For the 1954 Act to apply, s.23(1) must be satisfied which requires actual occupation of a tenancy for the purposes of a business.

Some tenancies are excluded from these protections under s.43, and unless the Landlord and Tenants have contracted out of these provisions the act will apply. Landlords and Tenants can contract out of the provisions if the Landlord serves advanced notice 14 days before the Tenant is bound to enter the lease. The tenant signs a simple declaration* agreeing to the consequences of the notice. The tenancy reflects the notice and the declaration.

* If less than 14 days notice is given a Tenant must sign a statutory declaration.

Protection Provided

Protected tenancies give the Tenant two layers of protection (s.24(1)):

The right to hold over (i.e. stay in actual occupation) past the contractual expiry date (‘CED’); and

The right to apply to the court for an order for the grant of a new lease of the premises.

Landlord’s Notice

The Landlord can serve a s.25 notice to terminate the lease which can either be:

Hostile - the Landlord is unwilling to grant a new lease (specifying the grounds for opposition); or

Friendly - the Landlord is willing to grant a new lease (specifying the proposed terms of the new lease).

Both types of notice should state the ‘specified termination date’ (‘STD’) and be in the prescribed form. The SDT must not be before the CED; and the SDT must be at least 6 months, but not more than 12 months from the date of the request.

Grounds for Opposition

If hostile notice is served then the Landlord should apply to the court for termination of the lease without the grant of renewal (s.29(2)) and must establish the grounds for opposing the grant of the new lease by the CED (s.29A).

The following sections are discretionary - (a), (b), (c) & (e) - which means the court may decide to terminate the lease and not order another lease to be created. Therefore the other sections (i.e. (d), (f) & (g)) are mandatory provisions meaning that if the Landlord can prove them the court must terminate the lease.

s.30(1)(g) is subject to the 5 year rule which mean that this grounds cannot be used if the Landlord has owned the property for less than 5 years. In addition, along with (f) the Landlord must show that they have a firm and settled intension to either demolish the property (planning permission can be used as evidence) or occupy the premises themselves.

Tenant’s Request

The Tenant can request a new tenancy be granted (s.26) if the application is completed in the prescribed form and served on the competent Landlord. The request should set out the proposals for the new lease and state the proposed commencement date (‘PCD’).

The PCD must not be before the CED, and must be at least 6 months, but not more than 12 months from the date of the request.

If the market rates have fallen the Tenant will want to start the new lease as soon as possible so they can take advantage of the lower rates (i.e. a 6 month start date), whereas if market rates have risen they will want to delay the start date to hold onto the lower rent they currently have (i.e. a 12 month start date).

After the request is served the Landlord must serve a counter notice within 2 months of the s.26 request. They can either serve a friendly (accepting the lease) or hostile (opposing the lease) notice. If the Landlord does not serve a counter notice they cannot object to the grant of the new lease.

One of the parties then has to apply to court, this is likely to be the Tenant because if neither party applies to court then the Tenant will lose the protection given by the 1954 Act. The deadline for applying to the...