Reform of Landlord and Tenant Act 1954

From 1 June 2004 the Landlord & Tenant Act 1954 Part 2 has been reformed by Statutory Instrument to try to modernise and streamline the procedures laid out in the Act. This will affect most business tenancies. To remind you, the Act provides protection for business Tenants so that they can renew their leases except in stated circumstances.

Much of the legislation remains unchanged but the new procedures will affect the granting of new leases where the parties wish to exclude the security of tenure provisions as well as the procedures to be adopted by both Landlords and Tenants when terminating or renewing existing leases.

Previously in order for a tenancy to be excluded from the Tenant's automatic right to renew a lease at the end of a lease term, it was necessary to obtain a Court Order to agree that arrangement.

From 1 June 2004, the Courts are no longer involved. The Landlord is now required to serve a prescribed form of Notice known as a "Health Warning". Following service of that Notice there is a 14 day time period for the Tenant to agree to the exclusion of the tenancy, which he will do by signing a simple form of Declaration confirming that he has received and accepts the consequences of the Notice. Alternatively, if the 14 day period is to be waived, the Tenant must sign a prescribed form of Statutory Declaration.

The Tenant's Declaration must be signed before the lease is completed and, as was the procedure previously, the lease itself must make reference to the fact that the parties have agreed to "contract out" of the Act.

Whilst this may simplify the exclusion procedure, it will inevitably create a number of new issues.

Andrew Woods
Partner

July 2004