A Business Tenants Request For A New Tenancy

A business may want to request a new tenancy agreement from the landlord in order to adapt it to changes faced by the business and to arrange more favourable terms. This often occurs where a tenant intends to sell the business or expand and the existing tenancy is reviewed.

A tenants request for a new tenancy must be carried out using the prescribed form – under section 26 of the Landlord and Tenant Act 1954 (the ‘Act’).

A Section 26 Notice cannot be made if the landlord has already made a Section 25 Notice (to end a current tenancy and propose terms for renewal or prevent the tenant renewing).

The request must include the date when the new tenancy begins. Under section 26(2), the date shall be no “more than twelve nor less than six months after the making of the request, as may be specified therein”. It must not be the date on which “the current tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the tenant.”

Section 26(3) states the request must include the tenant’s proposals as to the property to be comprised in the tenancy (being either the whole or part of the property comprised in the current tenancy). It must also include proposals as to the rent, the length of the lease and as to other terms of the new tenancy.

The request must be served by or on behalf of the tenant (all of them, where there is a joint tenancy, unless s.41A of the Act applies where the joint tenancy is held by a partnership, in which case only those tenants who are partners carrying on the business need to serve the request) on the landlord or its agent.

The new tenancy will begin on the date set out in the request. The day before this date will be when the current tenancy ends. If the landlord disagrees, either party may apply to the court to settle any terms causing concern. If the landlord successfully argues one or more of the reasons set out in the Landlord and Tenant Act 1954, the court will order an end to the tenancy. If the landlord is unsuccessful in opposing the request, the court will order the grant of a new tenancy.

The landlord must respond to a tenant’s Section 26 request within two months of receiving it if he wishes to oppose the proposed new lease.

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