Tenants of business leases are often unsure as to how to bring their lease to an end where it is protected under the Landlord and Tenant Act 1954.
If the lease is protected under the Act, a business tenancy does not automatically terminate at the end date of the term and it will continue on the same terms until it has been brought to an end in accordance with the Act.
If the tenant wants the tenancy to end at the expiry date of the lease, he should serve a section 27(1) Notice on his landlord notifying him that he wishes to terminate the tenancy.
There are certain rules that the Tenant must follow when serving the Notice on the landlord:
The notice must be given to the immediate landlord
The notice must be served no later than three months before the expiry date of the lease. The effect of the notice is to terminate the tenancy automatically on the expiry of the lease. Alternatively, the tenant can just vacate the property on or before the expiry date of the lease.
If the tenancy has continued after the expiry date by virtue of the Act (i.e. the contractual expiry date of the lease has passed), the tenant can generally only be terminate the lease by following the procedure specified by the Act and serve a section 27(2) Notice on his immediate landlord specifying a date on which the tenancy is to terminate. The termination date must be a minimum of three months from the date of the notice. The tenant will be liable for rent up to the termination date specified in the notice regardless of whether he vacates prior to that date.
The lease can also be terminated outside of the Act, subject to the lease containing the relevant provisions which allow the tenant to serve a notice to quit or the landlord forfeiting the lease.
It should be noted that the landlord can also agree to a surrender of the lease by the tenant, regardless of the lease provisions.