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A tenant of a commercial lease has a statutory right to a lease renewal at the end of the contractual term if it satisfies criteria as per the Landlord and Tenant Act 1954 (LTA 1954). A landlord can oppose the tenant’s statutory right to a lease renewal on any of the 7 grounds set out in Section 30(1) of the LTA 1954.
A landlord must notify the tenant of its opposition to a renewal lease by notice. The notice must adhere to the following:
If the tenant were to serve a notice in accordance with section 26 of the Landlord and Tenant Act in its request for a new lease, a counter notice must be served within two months of receiving the tenant’s request and must specify the grounds of opposition the landlord is claiming.
The landlord can specify more than one ground of opposition. However, if they fail to specify a particular ground of opposition in its section 25 notice or section 26 counter-notice, the landlord will not be able to oppose a lease renewal on that ground at a later date. Once a ground of opposition has been specified, it cannot be changed for an alternative ground and further grounds cannot be added in later.
A tenant with security of tenure under the Landlord and Tenant Act is entitled to compensation if it does not obtain a new lease solely because the landlord has established a “no fault” grounds of opposition. These include the grounds listed 5, 6, and 7. It is therefore in the landlord’s interest to succeed on “fault ground”, being grounds listed 1, 2, 3, and 4. If the landlord successfully opposes the lease renewal on any of the “fault grounds”, the tenant will not be entitled to statutory compensation.
If you have any questions on the grounds of opposition for commercial lease renewals under section 30(1) LTA 1954, or you wish to discuss a related matter, contact Fareeda Malik.
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