Topic 10 - Business Tenancies

Question 1

What is the purpose of security of tenure in business tenancies?

Answer 1

To protect tenants by allowing them to continue occupying premises beyond the end of their fixed lease term

Question 2

What is a common duration for most commercial leases?

Answer 2

10 years

Question 3

Why are tenants at a disadvantage at the end of a lease?

Answer 3

Landlords are in a stronger negotiating position due to the tenant’s established business in the premises

Question 4

What is the Landlord and Tenant Act 1954?

Answer 4

Legislation that provides qualifying business tenants with security of tenure

Question 5

What rights does a tenant with security of tenure have at the end of their lease?

Answer 5

They may request a new tenancy and continue occupying the premises

Question 6

List three benefits of security of tenure for tenants.

Answer 6

• Ability to invest in premises
• Benefit from goodwill
• Reduced upheaval from moving

Question 7

List three benefits of security of tenure for landlords.

Answer 7

• More appealing premises
• Tenants may better maintain the property
• Potential for higher market rent at review

Question 8

What are the limitations of security of tenure for landlords?

Answer 8

Limits landlord’s freedom over property and compliance can be complicated

Question 9

What types of tenancies are excluded from security of tenure under the Landlord and Tenant Act 1954?

Answer 9

• Agricultural tenancies
• Mining leases
• Service tenancies
• Fixed term tenancies of six months or less

Question 10

What is a fixed term tenancy?

Answer 10

Creates exclusive possession and a proprietary interest, binding successors in title

Question 11

What is a periodic tenancy?

Answer 11

A tenancy that can be ended by notice but still creates exclusive possession and proprietary interest

Question 12

What is a licence in terms of property tenancy?

Answer 12

A personal permission to be on the land without a proprietary interest

Question 13

What is a tenancy at will?

Answer 13

A personal permission allowing exclusive possession but can be terminated by either party at any time

Question 14

What does ‘occupied by the tenant’ mean in the context of security of tenure?

Answer 14

The tenant must occupy the premises; leaving them vacant disqualifies them from security of tenure

Question 15

What is meant by ‘for the purposes of a business’ under the Landlord and Tenant Act 1954?

Answer 15

Includes any trade, profession, or employment as defined by case law

Question 16

Give an example of a business purpose under the Landlord and Tenant Act 1954.

Answer 16

• A charity shop
• A tennis club for members only
• Residential use that supports a business

Question 17

What is a section 25 notice?

Answer 17

A notice served by the landlord indicating the end of the current tenancy and potential for renewal

Question 18

What is the required notice period for a section 25 notice?

Answer 18

No less than 6 months and no more than 12 months before the date of termination

Question 19

What are the two types of section 25 notices?

Answer 19

• Friendly section 25 notice
• Hostile section 25 notice

Question 20

What is a friendly section 25 notice?

Answer 20

Indicates the landlord is willing to renew the lease, providing peace of mind for rental income

Question 21

What grounds can a landlord use to oppose renewal of a tenant’s lease?

Answer 21

• Persistent and serious breach of repairing obligation
• Persistent delay in paying rent
• Suitable alternative accommodation offered
• Intention to occupy the premises

Question 22

What are mandatory grounds in the context of lease renewal?

Answer 22

If established, the court must grant possession to the landlord

Question 23

What is the rateable value?

Answer 23

Estimated annual rental value of premises fixed by local authority for calculating business rates

Question 24

Fill in the blank: Security of tenure provisions apply only to a _______.

Answer 24

tenancy

Question 25

What is a contracted out tenancy?

Answer 25

A fixed term lease that parties agree to exclude from security of tenure provisions

Question 26

What is the procedure for contracting out of security of tenure?

Answer 26

Landlord must serve a warning notice and tenant must provide a declaration before lease completion

Question 27

What happens to a non-protected tenancy at the end of the contractual term?

Answer 27

The tenant has no right to occupy beyond the term and may be treated as a trespasser

Question 28

What options does a tenant have to end a protected tenancy?

Answer 28

* Vacate premises * Surrender the lease * Serve notice to quit * Request a new tenancy

Question 29

What is required for a protected lease to contract out of paying compensation?

Answer 29

The tenant must have been in occupation for less than five years.

Question 30

Define rateable value in the context of business rates.

Answer 30

Rateable value is based on estimated annual rental value of premises, fixed by local authority for calculating business rates.

Question 31

What is required as evidence for Ground (a) in lease termination?

Answer 31

Evidence of a serious breach of tenant repairing obligation.

Question 32

Is Ground (a) compensatory?

Answer 32

No, it is discretionary and not compensatory.

Question 33

What evidence is needed for Ground (b) regarding persistent delay in paying rent?

Answer 33

Evidence of length of delay and number of failures to pay rent on time.

Question 34

What is the nature of Ground (c) related to tenant obligations?

Answer 34

Evidence of serious and persistent breaches, discretionary and not compensatory.

Question 35

What must a landlord provide under Ground (d) regarding alternative accommodation?

Answer 35

An offer of alternative accommodation suitable to the tenant.

Question 36

Is Ground (d) compensatory?

Answer 36

No, it is mandatory and not compensatory.

Question 37

What evidentiary requirement is associated with Ground (f) for intention to demolish or reconstruct?

Answer 37

Firm and settled intention to redevelop, possibly with planning permission or construction contract.

Question 38

Is Ground (f) compensatory?

Answer 38

Yes, it is mandatory and compensatory.

Question 39

What is Ground (g) related to landlord's intention?

Answer 39

Landlord intends to occupy premises, must have owned reversion for at least 5 years.

Question 40

Is Ground (g) compensatory?

Answer 40

Yes, it is mandatory and compensatory.

Question 41

What is a surrender in lease terms?

Answer 41

When the tenant gives up its leasehold interest to the landlord, bringing it to an end.

Question 42

What is the purpose of a section 26 notice?

Answer 42

To propose a renewal lease.

Question 43

Why might a tenant serve a section 26 notice?

Answer 43

For certainty of a fixed term or to benefit from a lower market rent.

Question 44

What is the minimum notice period for a section 26 notice?

Answer 44

Six months.

Question 45

What is the maximum notice period for a section 26 notice?

Answer 45

Twelve months.

Question 46

What happens if a landlord opposes a section 26 notice?

Answer 46

They must serve a counter-notice within two months.

Question 47

What must a section 27 notice include?

Answer 47

Three months of intended termination date.

Question 48

When can a tenant serve a section 27 notice?

Answer 48

No earlier than the date on which the contractual term ends.

Question 49

What is the procedure following a section 25 notice?

Answer 49

Either party may apply to the court to renew the lease or recover possession.

Question 50

What is the deadline for applying to court after a section 25 notice?

Answer 50

The date of termination specified in the notice.

Question 51

What is interim rent?

Answer 51

Rent payable during the holding over period, based on open market rent.

Question 52

What happens if a tenant is not happy with court-determined lease terms?

Answer 52

They have 14 days to ask the court to revoke the order.

Question 53

What is the effect of a court order for lease termination?

Answer 53

It brings the existing lease to an end, tenant has no right to remain.

Question 54

What is the difference between a section 25 notice (friendly) and (hostile)?

Answer 54

Friendly proposes renewal; hostile opposes renewal on statutory grounds.

Question 55

What is the notice period for section 25 and section 26 notices?

Answer 55

6 to 12 months.

Question 56

What is a 'competent landlord'?

Answer 56

The first landlord in the chain who owns a reversionary interest that won't end in 14 months.

Question 57

What is the corresponding date rule regarding notice expiration?

Answer 57

A notice served on the last day of the month ends on the last day of the appropriate month.

Question 58

What is the proposed commencement date (PCD) for a renewal lease?

Answer 58

The date specified by the tenant for the start of the new lease term.

Question 59

What happens if a section 27 notice is served?

Answer 59

The tenant cannot serve a section 26 notice, nor can the landlord serve a section 25 notice.