News

Tenants’ Rights At The End Of The Lease

18/09/2017

There are many questions regards the tenants rights at the end of a lease and the lines to what is correct and incorrect can get blurred.

David Grove, Partner in Commercial Property at FBC Manby Bowdler, answers some crucial questions that can help lift the mist on the subject.

1. If a Tenant has security of tenure under the Landlord and Tenant Act 1954, can a Landlord refuse to grant the Tenant a new lease ?

Yes, but in order to do so, the Landlord must serve a formal notice in the form prescribed by the Act (giving at least six months notice) and prove one of the limited number of grounds for refusal specified by the Act.

2. What are the prescribed grounds for refusal ?

There are complex provisions surrounding each of these but essentially, and briefly, they are broken down into the following:
(i) the Tenant is in breach of his obligations under the lease and ought not to be granted a new one
(ii) the Landlord offers the Tenant suitable alternative accommodation
(iii) the lease was a sub letting of part and the rent for a letting of whole would be substantially higher than the aggregate rents from lettings of parts
(iv) the Landlord intends to demolish or reconstruct or carry out substantial works to the Property and could not do so without regaining possession (known as "ground (f)")
(v) the Landlord intends to occupy the Property for his own purposes (known as "ground (g)").

3. What must the Landlord to do to satisfy "ground (f)" referred to above ?

The Landlord must prove that he has a real intention of carrying out the works, has a reasonable prospect of being able to do so, that he can start the works within a reasonable time after the end of the existing lease and that he could not carry out these works if the Tenant had a lease of the Property.

4. What must the Landlord do to satisfy "ground (g)" above ?

The Landlord must intend that the Property is occupied by himself (or someone on his behalf, e.g. his business or company). He must have a real intention of doing so, and a reasonable prospect of achieving that. The Landlord must also have owned the Property for at least five years.

5. If a Landlord cannot prove one of the grounds for refusal specified in the Act, can the Landlord remove the Tenant ?

Only if:
(i) the Landlord has grounds under the lease to terminate it (e.g. forfeiture) or
(ii) the Landlord serves the formal notice referred to above and the Tenant fails to make an application to the Court for a new tenancy within the prescribed time-limit.