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New commercial landlords: Understanding the Landlord and Tenant Act 1954

The Landlords and Tenant Act of 1954 is vital to understand when starting out as a commercial landlord.

It is required by law to be included in nearly all commercial rental contracts between a landlord and tenant.

What is the Landlord and Tenant Act 1954?

This Act was implemented in 1954 for the protection of both landlords and tenants when letting out property for commercial use.

Its purpose is to lay out the obligations of both the tenant and the landlord clearly, benefitting both parties in its protection against things such as forfeiture (breaches of contract) and notice periods.

How do I know if the Act is applicable to me?

The Landlord and Tenant Act 1954 will apply to most commercial lets, but there are some which will be excluded. These include:

  • Licenses
  • Tenancies at Will
  • Agricultural Tenancies
  • Tenancies shorter than six months

It may also be possible to specifically create a tenancy outside of the Act. This means that the Act will not apply to the rental agreement. However, this must be made prior to the lease being signed and both landlord and tenant must agree.

If your lease doesn’t apply to any of the above-mentioned things, then it will automatically fall under the Landlord and Tenant Act 1954.

What are the basics of the Act?

In its rawest form, the purpose of the Landlord and Tenant Act 1954 is to dictate that the tenant must have the right to renew their lease at the end of the original contracted period.

This means that landlords cannot have another tenant ready to move in unless they have been told by the current tenant that they will be departing the property.

How is a lease ended with this Act?

A way where a lease protected by this Act can be ended early is if a break clause is included within the original contracts. A break clause is where it is written that either the landlord or tenant can end the lease early without any kind of penalty.

Otherwise, the lease can be ended by forfeiture, surrender by agreement of parties, three months’ written notice by the tenant, or by the end of the contractual term of the lease.

It should be noted that sections 25 and 26 of the Act dictate that statutory notice can also be given, so long as it follows the notice requirements prescribed within these sections.

For advice on commercial lettings and the Landlord and Tenant Act 1954, contact us today.

Carl Jones

Director - Head of Commercial Department

I qualified as a Solicitor having completed my training with Mander Hadley in 1992 and am a member of the Law Society Property Section and The Warwickshire Law Society.