Commercial tenancies

Contracting out

A commercial tenancy which is a 'business tenancy' may attract security of tenure under the Landlord and Tenant Act 1954 (LTA 1954). A ‘business tenancy’ is one where property is occupied for the purposes of a trade or profession within the meaning of LTA 1954, s 23, unless specifically excluded by LTA 1954, s 43, or where occupation is as a licensee or tenant at will.

Where security of tenure applies, the end of the contractual term does not mean the end of the tenancy. The tenant is entitled to remain in occupation, and to call for a new lease, unless the landlord can rely on one or more of the statutory grounds for regaining possession. If the landlord can rely on one of the statutory grounds, termination of the tenancy may involve payment of compensation in ‘no-fault’ cases.

If a landlord and tenant agree to exclude, or ‘contract out’ from, the security of tenure provisions in LTA 1954, ss 24–28, the landlord must serve a ‘warning notice’ on the tenant, explaining that security of tenure will not apply. The

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