Landlord and Tenant Act 1954

Whether you are a landlord seeking to recover possession of commercial premises at the end of a lease, a tenant whose business depends on securing a new tenancy on the right terms, or either party navigating a disputed lease renewal, our property disputes solicitors have extensive experience advising on all aspects of the Landlord and Tenant Act 1954.

What is the Landlord and Tenant Act 1954?

The Landlord and Tenant Act 1954 (the 1954 Act) governs the relationship between landlords and tenants of commercial premises. The 1954 Act provides qualifying business tenants the statutory right to security of tenure, meaning, the right to remain in occupation of their premises after the contractual term of their lease has expired and, in most cases, the right to apply to the court for a new tenancy.

When does the 1954 Act apply?

The 1954 Act applies to any tenancy where the property is or includes premises occupied by the tenant for the purposes of a business carried on by them. It covers a wide range of commercial occupations, from offices, shops and warehouses to restaurants, surgeries and mixed-use premises. Its application does not depend on the size of the business or the value of the lease. Where the 1954 Act applies, neither the landlord nor the tenant can simply ignore it: the 1954 Act imposes a statutory framework of notices, deadlines and court proceedings that both parties must engage with.

What is the purpose of the 1954 Act?

The 1954 Act strikes a deliberate balance between the interests of landlords and tenants. Tenants benefit from the security of knowing that their business will not simply be turned out of its premises at the end of a lease without good reason and without the opportunity to seek a renewal. Landlords retain the ability to recover possession where they can establish one of a number of statutory grounds, and to negotiate the terms of any new tenancy. The right balance between those competing interests is often the central issue in a 1954 Act dispute.

You will find answers to common questions around property disputes relating to the Landlord and Tenant Act 1954 in the FAQs at the bottom of this page.

What does a solicitor who specialise in the 1954 Act do?

Our property disputes solicitors have extensive experience advising both landlords and tenants in relation to the 1954 Act, from initial advice on whether the Act applies and the strategic options available, to service and response to statutory notices, negotiation of renewal terms, and contested court proceedings where agreement cannot be reached. 1954 Act disputes are deadline-sensitive and missing any of the statutory time limits can have irreversible consequences.

Our aim is always to resolve 1954 Act matters without the need for contested court proceedings wherever possible – the majority of lease renewals are agreed by negotiation between the parties. Reaching an agreed outcome is almost always quicker, cheaper and less disruptive to both sides than litigating the terms of a new lease. Where agreement cannot be reached, however, the property disputes team has the expertise to take a contested renewal or opposed termination through to trial. The team’s ethos is simple: solve the problem.

The team works closely with the firm’s commercial property team on lease renewals that involve both contentious and non-contentious elements, ensuring that clients receive joined-up advice on the legal and commercial aspects of their renewal.

Why choose B P Collins as your solicitor for a dispute involving the 1954 Act?

With over 60 years of experience advising on the 1954 Act, we’re consistently ranked by Chambers UK and The Legal 500 for the strength of our property disputes practice. Our solicitors have helped hundreds of landlords and tenants navigate their rights under the 1954 Act with confidence and clarity.

As with most disputes, early advice can frequently result in a swift outcome, avoiding unnecessary escalation and protecting your position before it becomes more difficult to assert.

Contact our 1954 Act solicitors today

Whether you are a landlord or a tenant, for further information or advice on the Act 1954, please contact our specialist solicitors. Our teams are based in London, Thame and Gerrards Cross, and can be contacted on 01753 889995 or at enquiries@bpcollins.co.uk.

Landlord and Tenant Act 1954 FAQs

Does the 1954 Act apply?

The 1954 Act applies to a tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by the tenant. Each element of that test matters.

The tenancy must be a tenancy. A licence will not qualify. The property must be occupied by the tenant: a tenant who has sublet the entirety of the premises and retains no physical presence there will generally not be in occupation for the purposes of the 1954 Act, though a tenant who sublets part and retains occupation of part may still qualify in respect of the part they occupy. The occupation must be for the purposes of a business, which is broadly defined and includes a trade, profession or employment, as well as any activity carried on by a body of persons, whether corporate or unincorporate.

Which tenancies are excluded from the 1954 Act?

These include agricultural tenancies, mining leases, tenancies of licensed premises (in certain circumstances), service tenancies and fixed-term tenancies not exceeding six months (subject to important qualifications). Where a lease has been validly contracted out of the 1954 Act the security of tenure provisions will not apply.

Whether the 1954 Act applies is sometimes far from straightforward, particularly where the nature of the occupation has changed over the course of the tenancy, where the tenant is a company and the business is carried on by associated individuals, or where mixed residential and business use is involved.

What does security of tenure mean in practice?

Security of tenure means a business tenant protected by the 1954 Act cannot be required to leave the premises simply because the contractual term of their lease has come to an end. When a protected tenancy expires, the tenancy continues automatically until it is brought to an end in accordance with the Act’s procedures. The tenant remains in occupation on the same terms as before and continues to pay rent, while the parties negotiate or litigate the terms of any new tenancy.

Termination of a protected tenancy requires one of three things. Either:

the landlord serves a statutory notice under section 25 of the Act (a ‘section 25 notice’) either opposing or not opposing the grant of a new tenancy; or
the tenant serves a statutory request under section 26 of the Act (a ‘section 26 request’) requesting a new tenancy; or
the tenant serves a statutory notice under section 27 of the Act (a ‘section 27 notice’) giving the landlord 3 months’ notice that it will not be seeking a new lease and that it be vacating the premises.

In either case, strict procedural requirements apply and strict time limits govern the steps that must be taken after the notice or request is served. For tenants, security of tenure provides important protection for the goodwill and continuity of their business. For landlords, it means that recovering possession of commercial premises at lease expiry is not automatic: unless the landlord can establish one of the statutory grounds for opposing renewal, the tenant is entitled to a new tenancy and the landlord’s ability to redevelop or reoccupy the premises is subject to the terms of the Act.

What does it mean to contract out of the Act?

It is possible for a landlord and tenant to agree, before a lease is granted, that the security of tenure provisions of the 1954 Act will not apply to that lease. This is known as ‘contracting out’ of the Act. A lease that has been validly contracted out is sometimes referred to as an ‘excluded tenancy’.

Contracting out requires compliance with a prescribed procedure. If any of the required steps are missed or defective, the purported exclusion may be ineffective and the tenant may have full security of tenure under the Act notwithstanding the parties’ intention.

Whether to contract out is a significant decision for both parties. From a landlord’s perspective, an excluded tenancy provides certainty: at expiry, the tenant has no statutory right to remain or to demand a new tenancy, and possession can be recovered without the need to establish any ground of opposition. From a tenant’s perspective, contracting out means giving up the statutory protection that the Act provides, which may be acceptable for a short-term letting but is a more significant concession for a longer term.

On what grounds can a landlord oppose the grant of a new tenancy?

A landlord who wishes to oppose the grant of a new tenancy must rely on one or more of the grounds set out in section 30(1) of the 1954 Act. Those grounds are exhaustive: a landlord cannot oppose renewal on any ground not listed in the Act, however commercially compelling their reasons for wanting to recover possession. Details about the individual grounds can be found here.

Is a tenant entitled to compensation if the landlord successfully opposes renewal?

Yes, in certain circumstances. Where the court refuses to order a new tenancy on one of the grounds in section 30(1), but only where the ground relied upon is ground (e), (f) or (g), the tenant is entitled to statutory compensation.

Compensation is not available where the landlord succeeds on one of the tenant default grounds.

The amount of compensation is calculated by reference to a multiplier applied to the rateable value of the premises. The basic multiplier is one times the rateable value. However, where the tenant (or their predecessor in the same business) has been in occupation of the premises for the purposes of the business for a period of at least 14 years, the multiplier is doubled to two times the rateable value. The rateable value used for this purpose is the rateable value shown in the current rating list at the date the tenancy comes to an end.

What is interim rent?

Interim rent is the rent payable by the tenant during the period between the contractual expiry of the tenancy (or the termination date specified in a section 25 notice or section 26 request) and the grant of a new tenancy (or the final resolution of the proceedings). Because lease renewals, particularly contested ones, can take many months or years to resolve, the question of what rent is payable during the renewal period is often a significant one for both parties.

How is interim rent calculated?

Either the landlord or the tenant can apply to the court for an interim rent determination. In most cases, the interim rent will be the same as the rent payable under the new tenancy once agreed or determined by the court. However, where the new tenancy differs significantly in its terms from the old tenancy (for example, where the property market has moved substantially since the original lease was granted), the court may assess a different interim rent that more fairly reflects the rental value of the premises during the renewal period.

Interim rent is backdated to the earliest date on which it could have been applied for – generally the date specified in the section 25 notice or section 26 request. This means that where a party delays in making an interim rent application, they may be entitled to recover (or obliged to pay) backdated rent once the application is determined, potentially amounting to a significant sum. For landlords, making a prompt interim rent application can be an important tool in incentivising tenants to agree renewal terms without delay. For tenants, understanding the interim rent position is an important part of assessing the financial implications of a protracted renewal.

How are the terms of a new tenancy determined?

Where the landlord does not oppose the grant of a new tenancy, the parties will usually seek to agree the terms of the new lease by negotiation. In many cases agreement is reached without the need for court intervention. Where agreement cannot be reached, either party can apply to the court to determine the terms, and the court has a broad discretion to order a new tenancy on such terms as it thinks fit having regard to the terms of the current tenancy and to all relevant circumstances.

What if the tenant does not want a new tenancy?

A tenant is not obliged to renew.

A tenant can serve a ‘section 27 notice’ on the landlord and not pursue their renewal rights. A tenant who vacates without taking the correct steps to bring their protected tenancy to an end may find themselves liable for continuing rent until the tenancy is properly terminated.

What are the key deadlines under the Act and what happens if they are missed?

Once a section 25 notice or section 26 request has been served, a strict deadline applies by which an application to the court must be issued if the renewal or opposition is to be pursued. If that deadline is missed, the right to a new tenancy, or the right to oppose on the stated grounds, is lost and cannot be revived.

For landlords, failing to serve a valid section 25 notice, or serving one that is defective, can mean that the tenancy continues to run and that the opportunity to oppose renewal on a time-sensitive ground is lost. For tenants, failing to respond correctly to a section 25 notice, or failing to issue a court application in time, can result in the loss of security of tenure and the right to a new tenancy.

The most important message for any landlord or tenant approaching a 1954 Act lease expiry is this: take legal advice early and do not allow deadlines to approach without specialist guidance.

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