Business lease renewal—s 29(5) and costs
Business lease renewal—s 29(5) and costs

The following Property Disputes guidance note provides comprehensive and up to date legal information covering:

  • Business lease renewal—s 29(5) and costs
  • When does the dismissal take effect?

To overcome delay or uncertainty in the lease renewal process under the Landlord and Tenant Act 1954 (LTA 1954) a landlord may issue proceedings for the grant of a new lease. Proceedings can be issued:

  1. at any time after service of a s 25 notice, or

  2. at any time two months after service of a tenant’s s 26 request (or sooner if the landlord serves a counter-notice pursuant to LTA 1954, s 26(6))

Within 14 days of service of the proceedings, the tenant must file an acknowledgment of service stating whether it wishes to have a new tenancy.

For guidance on proceedings under LTA 1954, see Practice Note: LTA 1954 business lease renewal—proceedings.

However, if the tenant decides before trial that it does not want a new lease the court must dismiss the landlord's application. Until the Court of Appeal ruling in Lay v Drexler this was thought to represent a costs risk for landlords.

In Lay, the Court of Appeal decided that:

  1. where a landlord applies for the grant of a new tenancy under LTA 1954, s 24(1), and

  2. the tenant, having entered an acknowledgment