#3398 - Termination Clauses Lta 1954 Crib Sheet - Property Law and Practice

Termination Clauses - LTA 1954

1. Is the lease one to which LTA54 applies?

   1. If not, lease will expire on the contractual termination date (STATE DATE) and landlord will be able to obtain possession at that point

   2. Contracted-out tenancies

      1. For leases granter prior to 1 June 2004 approval of court to contract out had to be obtained prior to the grant of the lease

      2. For leases granted on or after 1 June 2004 a notice procedure has to be complied with before the grant of the lease Reg 29(2) 2003 Order

         1. Landlord must give the tenant notice in a prescribed form which contains a warning to the tenant that he is agreeing to a lease without security of tenure, advising him to obtain professional advice

         2. Tenant must make a declaration that he has received the notice & agrees lease should be contracted out

            1. If tenant given notice less than 14 days before grant of lease then tenant’s declaration must be made in the form of a statutory declaration before an independent solicitor

         3. A reference to the service of the notice & tenant’s declaration must be contained or endorsed on a document creating the lease

   3. If there is a tenancy, the premises is occupied by the tenant & for business purposes then LTA54 will apply and the tenancy will not come to an end at the expiry of fixed term, but will continue by virtue of s24. Landlord will have to comply with procedure under the act in order to determine the lease

      1. Tenant must have exclusive possession for terms of years absolute or fee simply in possession

      2. Excluded tenancies

         1. Tenancies at will

         2. Tenancies not exceeding 6 months

            1. If occupation of more than 12 months then will not be excluded

         3. Contracted out tenancies 38(4) LTA54

      3. Occupied

         1. Can be through an agent, manager or company owned by the tenant

      4. For business purposes

         1. 23(2) widely defined

            1. Any act carried out by a body of persons

            2. Business use need not be sole purpose of occupation but must be main purpose and not merely incidental to a residential or other purpose

            3. Does not need to be profit making

2. What is the procedure for a landlord to terminate the lease?

   1. Surrender the lease – need mutual agreement from tenant & landlord

   2. Periodic tenancy

      1. Landlord gives tenants a notice to quite, expiring at the end of the completed period of tenancy

   3. Forfeiture

      1. 146 LPA notice

         1. Specify breach

         2. Require remedy in reasonable time

         3. Tenant pay compensation

      2. 147 LPA 1925 tenant can apply for relief for internal decorative repairs (PAGE 265-5 CP)

   4. Serve a s.25 notice on tenant stating that landlord wishes to terminate lease

      1. Carried out between tenant and tenant’s competent landlord

         1. 44 sub-tenant’s competent landlord is defined as person who has a superior tenancy which will not come to an end within 14 months

            1. If there is no such tenant, then the competent landlord will be the freeholder

   5. Notice must be served not less than 6 nor more than 12 months before termination date stated in notice

      1. Termination date cannot be before the contractual determination date stated in the lease

      2. APPLY TO FACTS

   6. S.25 notice must state at least one of the 7 grounds in s30(1)(a)-(g):

      1. Tenant’s failure to repair (discretionary)

      2. Persistent delay in paying rent (discretionary)

      3. Substantial breaches of other obligations (discretionary)

      4. Alternative accommodation

      5. (Sub-letting of part where higher rent obtained by single letting (discretionary))

      6. Firm & settled intention for substantial works of redevelopment or demolition which cannot reasonably be carried out without obtaining legal possession

         1. Must show practicable to carry out intention at DATE OF HEARING

         2. 37A LTA54 If there is any misrepresentation on part of landlord in respect of its intention will entitle the tenant to compensation

         3. 31A LTA54 ground will not be established if tenant will agree to new lease including access & other rights for landlord enabling him to carry out works without possession or accept new lease of economically separable part of holding with, if necessary, access rights for landlord

      7. Landlord’s intention to occupy holding for his own business or residence

         1. Show not only intention to occupy holding, but reasonable prospect of being able to do so

         2. Marazzi v Global Grange

            1. Planning permission, design teams, finance, board meeting minutes

         3. Court will not assess the viability of the proposed business venture provided the intention to occupy is genuine

         4. 30(2) Landlord cannot rely on this ground if his interest was purchased or created within 5 years of ending the current tenancy

            1. BUT ground will be available to landlord who buys property with vacant possession, lets it and then seeks possession within 5 years of buying it

               1. If landlord grants the lease to the tenant then the 5 year rule is irrelevant

      8. Tenant can apply to the court up until the termination date in s.25 notice, otherwise lose rights under the Act

         1. Time limits can be extended by agreement between the parties

      9. If landlord’s request refused then court will set duration of new lease which CANNOT exceed 15 years with a starting point at length of current tenancy

         1. Court to consider length of current tenancy, length requested by tenant, hardship caused to either party, current practice, landlord’s future proposals

         2. Court can insert a rent review clause in the lease, even though there was not one in the previous tenancy 34(3)

         3. Landlord can apply for interim rent from the earliest date he can put in the s.25 notice

         4. O’May up to persons who want to change lease to show fair & reasonable for such a change to take effect

      10. Lease will not commence until 3 months after proceedings are finally disposed of

          1. Time limit when appeal has elapsed = 4 weeks after the order

          2. Therefore new lease will commence 3 months & 4 weeks after the order

      11. If landlord is unhappy with the terms of the new lease he can appeal

      12. If tenant is unhappy with the terms of the new lease then he is able to apply for the order to be revoked

3. Is the Tenant entitled to...