Renewal of a Commercial Lease

Imagine the situation where you are the Tenant of business lease or even occupy premises for your business without a formal business lease and pay rent.  Your lease is coming to an end, or came to an end long ago but the Landlord has not served you with a notice under Section 25 of the Landlord & Tenant Act 1954 (the 1954 Act).

A notice under Section 25 of the 1954 Act is in your post today; it is a notice to quit.  It says that the Landlord does not oppose your application to the court for the grant of a new lease.  You assume all is well.  You think that you can put it away and get on with running your business.

This is all too typical a scenario in Landlord and Tenant law.  There may be a number of reasons for such a Notice, the Landlord may wish to clear the way for a sale of the property by auction.  If recent auction sales are anything to go by, the freeholds on the leases may well fetch a lot more than your valuer suggested they would.  Do not assume that you will be able to pick up the freehold at auction as someone with deeper pockets than you may be there and that person may have considered that your premises are ripe for redevelopment and will use all the lawful means open to him to achieve that objective, including getting rid of you.  So do not put that notice away and if you have, get it out quickly and take immediate legal advice

To protect your position you must:

• Serve a counter notice telling your Landlord that you are not willing to give up possession within two months of receiving the section 25 notice from the Landlord;

• Not less than two months and not more than four months after receiving the section 25 notice you must apply to the County Court for the grant of a new lease

• Pursuant to Section 87 (3) of the Land Registration Act 2002 (LRA 2002) you will need to register your pending application by means of a notice or restriction if the Landlord’s title is registered at H M Land Registry or as a pending action in the Land Charges Registry if the Landlord’s title is unregistered.

Your solicitor will do all these things for you but because of the strict timetables imposed you must instruct him in good time otherwise your rights may be lost.  So far as the third step is concerned, this is not yet settled law but arises because of the reduced number of overriding interests which exist under LRA 2002 since October 2003 when it came into force.  Registering your pending court application with the Land Registry or Land Charges Registry as the case may be will protect you against a third party taking the property without notice of your pending application.  This could happen in your Landlord sells his interest to a third party.  In this case the third could argue that he takes free from your pending application since he has no notice of it and for these purposes notice means registration.

So where did I put that notice thing that arrived sometime last month?

Article First Published: 20 February 2004

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The views on this website are not necessarily those of the Student Law Journal and is not intended to provide legal advice.  Any legal problems should be specifically addressed to a solicitor.

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