Excluding Security of Tenure from a Lease
The documents in this subfolder are concerned with excluding security of tenure from a lease. It may be a requirement of the landlord that the lease be excluded from the security of tenure provisions of the Landlord and Tenant Act 1954.
In general, tenants of commercial premises have security of tenure, which means they have the right to remain in occupation of the premises at the end of the term of the lease and can apply to court for a new lease to be granted. The landlord can only resist such an application on certain grounds.
However, the landlord and tenant can agree that the lease will be granted without security of tenure. The guidance in this folder explains the procedure a landlord and tenant must follow. The forms that need to be completed are included below.
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Frequently Asked Questions
My landlord wants the lease to exclude security of tenure, what does that mean? +
It means the lease is contracted out of the renewal provisions of the Landlord and Tenant Act 1954. Normally a business tenant can stay at the end of the term and apply for a new lease, with the landlord able to object only on the section 30 grounds. If security of tenure is excluded, you have no right to a new lease and must give up the premises when the term ends. It is a common landlord requirement, but it materially weakens the tenant's position, so factor it into the rent and term you agree.
What is the procedure to contract out of the 1954 Act? +
There are set steps that must all happen before the lease is entered into. The landlord serves a warning notice in the prescribed form telling the tenant that the lease will not have security of tenure. The tenant then makes a declaration confirming it has read and accepted the warning. Only once both are done can the contracted-out lease be completed. Miss a step and the exclusion fails. Simply-Docs provides the warning notice and declaration forms.
What is the difference between a simple and a statutory declaration when contracting out? +
It turns on timing. If the landlord serves the warning notice at least fourteen days before the lease is entered into, the tenant can sign an ordinary simple declaration. If there are fewer than fourteen days, the tenant must instead make a statutory declaration before an independent solicitor or commissioner for oaths, which adds a step and a small cost. The fourteen day gap is measured between the warning notice and completion, so plan the timetable to allow it if you want to avoid the statutory declaration.
What happens if the contracting-out procedure is not followed correctly? +
The exclusion fails and the lease keeps security of tenure. If the warning notice is not served before the tenant is bound, or the declaration is missing or defective, the attempt to contract out is ineffective, so the tenant has the ordinary right to renew under the Landlord and Tenant Act 1954. That is a serious point for the landlord, who may have expected vacant possession at the end. Getting the notice and declaration right, in the correct order and timing, is essential.
