Landlord and Tenant Act 1954

The Landlord and Tenant Act 1954 (2 & 3 Eliz. 2. c. 56) is an act of the United Kingdom Parliament extending to England and Wales. Part II of the act is a statutory code governing business tenancies. Part I of the act, which dealt with the protection of residential tenancies, is now largely superseded.

Part II of the act gives business tenants a degree of security of tenure. A business tenant protected by the act may not be evicted simply by the giving of notice to quit or by the ending of a fixed term of the tenancy. The landlord must serve a notice on the tenant, stating which of the seven grounds of opposition they wish to rely upon to oppose a new tenancy.

Applicability
Part II of the act applies to any tenancy where the property "is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes".

There are some exceptions under the act, which are included in section 43. These include mining leases and agricultural premises. The act does not protect leases with a term of less than 6 months which hold no scope to renew. Both parties can agree not to be covered. Additionally, a tenancy granted by reason of employment by the grantor is excluded from the act, providing that there is clear agreement in writing which states the purpose of the tenancy.

Case law
In Graysim Holdings Ltd v P.& O. Property Holdings Ltd., the House of Lords considered the situation of a lease of a market hall to a tenant who then let individual market stalls to market traders. The question considered was whether the tenant could take advantage of the protection offered by the act. The House of Lords decided that the tenant could not be said to occupy for the purposes of the business that was being carried on there (which was being carried out by the market traders).

This decision was followed in Bassairi Limited v London Borough of Camden, where the tenant let out the bulk of the premises as furnished apartments. Again, it was held that the tenant did not occupy for the purposes of a business.

Esselte AB v Pearl Assurance plc in 1997 established that when a tenant ceases to occupy the property for business purposes then their security of tenure will cease.

Amendments
The 1954 act was amended by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (SI 2003/3096), which was made on 1 December 2003 and came into effect on 1 June 2004. This order was adopted under the UK's regulatory reform agenda, which aimed at removing legislative burdens on businesses. The order implemented many of the recommendations of a Law Commission report of 1992 on business tenancies. The main changes adopted under this order were:
 * Where landlords are proposing to renew a tenancy under section 25 of the act they must state their proposed rent and other terms
 * the previous requirement for a tenant to serve a counter-notice was withdrawn
 * tenancies can be extended at the continuing existing rent
 * either landlord or tenant can apply to a court for an interim rent, and
 * a contracting-out procedure which existed under section 38(1) of the act was abolished.

A consultation draft for a revised form of section 25 notice was issued in January 2004. This required a landlord to set out the terms proposed for the new lease: without the inclusion of proposed terms the notice would not be valid. Lawyer Malcolm Dowden commented that landlords who simply wanted a section 25 notice "to contain a wish list of terms" would need to beware, arguing that a 2003 court ruling in Mount Cook v Rosen, which addressed the meaning of the term "proposal" as used in the Leasehold Reform, Housing and Urban Development Act 1993, was likely to be applied in Landlord and Tenant Act cases. This would require "proposed terms" to be read as "realistic" terms or terms based on expert valuation advice.