Unless a lease is contracted out, a business tenant has a right to a new lease upon expiry of their contractual term, subject to limited grounds.
Section 30(1)(g) of the Landlord and Tenant Act 1954 contains an ‘own occupation’ ground.
This allows a landlord to refuse the tenant a new lease if they can prove they want to occupy the property themselves.
If a landlord intends to refuse to grant a new lease based on the ‘own occupation’ ground, the landlord must have owned the property for at least 5 years.
What does the landlord have to prove?
You need to demonstrate that you have a settled intention to occupy all or the majority of the property when the tenant leaves.
If you wish to use for residential purposes, you must prove an intention to occupy the whole of the property.
What evidence does the landlord need?
If you plan to occupy and you would need planning permission (e.g change of use from commercial use to residential use) then you should obtain that or provide evidence that planning permission is likely to be granted.
How does the landlord start the process?
You must serve a notice pursuant to section 25 of the 1954 Act, quoting ground G (and /or any other grounds to refuse you can rely upon).
If the tenant has already served a notice (known as a section 26 notice) requesting a new lease, you must serve a counter notice within 2 months.
For further information, please contact our Commercial team at MBH Solicitors:
http://www.wigansolicitors.com Tel: 01942 206060 Address: 26 Bridgeman Terrace, Wigan WN1 1TD.
Written by our Gemma Eastham, Commercial Property Solicitor