Property Litigation specialist lawyer, Will Bartley, provides advice on Section 25 and Section 26 Notices – what they mean, and how to use them.
This is a technical area of Commercial Property and Notice provisions and deadlines need to be followed to the letter, otherwise parties can be barred from relying upon them.
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What are Section 25 and Section 26 Notices?
Both of these Notices refer to the Landlord and Tenant Act 1954.
A Section 25 Notice enables the landlord of a commercial property to either end or renew the tenancy, providing that certain conditions are met, which we will discuss shortly.
A Section 26 Notice enables the tenant to request a new commercial tenancy and affords the landlord an opportunity to reply and agree to that request.
In the event of either a rejection to it or a landlord failing to respond within the specified 2 month period, the tenant is able to commence Court proceedings to allow a Judge to determine the provisions/granting of a new agreement.
Both of these notices are for use where the parties have not contracted out at the start of the existing tenancy from Sections 24-28 of the Landlord and Tenant Act 1954.
I am a Landlord of a Commercial Property, when and why would I use a Section 25 Notice?
As mentioned above, a Section 25 Notice would be used by a landlord to either bring an end to a commercial tenancy or to suggest new terms for a renewal.
When should a s25 notice be served?
This Notice must be provided to the tenant no sooner than 12 months from the expiry of the current fixed term, but also no later than 6 months from the expiry of the current fixed term.
As some commercial tenancies have fixed terms of many years, the window for serving a Section 25 Notice is relatively small, and therefore it makes it all the more important that it is done correctly.
How do I retain my tenant after the expiry of the lease?
If you are a landlord and looking to retain your current tenant, you can serve a Section 25 Notice and propose new terms to the tenant for that new tenancy.
You can then negotiate with your tenant and hopefully reach a compromise and enter into a new commercial tenancy.
Where the tenant does not respond to the Notice, the tenancy will either continue on the proposed new terms or where the landlord has served a termination Notice, the tenancy will end on the date specified in the landlord's Notice.
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