Should you opt in or opt out of ‘the 1954 Act’ in relation to your commercial property?

What is the 1954 Act?

The Landlord and Tenant Act 1954 sets out the rights and obligations of both landlords and tenants in relation to any premises leased for business purposes.

In simple terms, the 1954 Act provides a tenant under any commercial lease with security of tenure when an agreed contractual term comes to an end. This means that a tenant has the right to remain in occupation at the end of the contractual term and the right to apply to court for the grant of a new lease. The landlord is able to regain possession of the premises but only on certain specified grounds, namely:

• where the tenant has a history of not complying with obligations under the lease including not paying rent;
• where the landlord requires the property back to occupy himself or develop; or
• where any premises have been sublet into a number of units and the whole premises would command a higher rent if let together.

Excluding the operation of the 1954 Act

The security of tenure automatically conferred by the 1954 Act can be excluded by the agreement of the landlord and the tenant. The exclusion is usually desired by landlords as it provides certainty that a term will cease on as a specified date and legally allows the landlord to regain possession. This allows the landlord to enter into fresh negotiations with the existing tenant or potentially a completely new tenant with a view to agree a new lease.

The Importance of Legal Advice

In order to exclude the provisions of the 1954 Act the landlord and tenant must adhere to the strict procedures set out in the 1954 Act. Whether you are a commercial landlord or tenant, it is vital that you take specialist legal advice to protect your position in relation to the 1954 Act.

Please do not hesitate to contact our experienced Commercial Property Team on 01267 237441 for more information.