What happens when a tenant receives a notice from their Landlord to leave the premises because they wish to refurbish it?
The media attention given to the recent problems at The Leadmill entertainment venue in Sheffield has led to interest in the mechanisms by which landlords can evict business tenants when their leases come to an end.
Sophie Kerry, litigator at Wake Smith Solicitors looks at the issue of termination without a lease renewal.
Under the Landlord and Tenant Act 1954, after the end of the contractual term for any agreement, a business tenancy will continue until it is terminated by one of the prescribed methods.
One of these prescribed methods is a Section 25 Notice.
A business tenancy can be terminated and a new lease can be opposed by a Landlord serving a valid Section 25.
A Section 25 Notice, where the Landlord wishes to oppose a new lease, will specify one of the grounds of opposition to a lease renewal. If the Landlord has indicated that they intend to refurbish the premises, it is therefore likely they have stated ground (f):
‘on the termination of the current tenancy the landlord intends to demolish or reconstruct the premises comprised in the holding or a substantial part of those premises or to carry out substantial work of construction on the holding or part thereof and that he could not reasonably do so without obtaining possession of the holding’.
The Landlord must do more than just state they intend to refurbish the property. They must show a firm and settled intention, and a reasonable prospect of achieving that intention.
Therefore the Tenant could put the Landlord to strict proof and ask for any plans in relation to the refurbishment and for them to show that they have an intention to proceed.
The Tenant could also suggest they agree to new terms in Lease which entitles the Landlord to enter and carry out the development works or a new lease of only part of the premises, if applicable.
Tenants can use this as an alternative defence if they fail to show that the Landlord does not intend to redevelop the premises.
For further information and advice on litigation matters contact Sophie Kerry on 0114 224 2036 or at [email protected]
