Protection for Tenants
Page 69
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New Landlord and Tenant Act Brings About Farreaching Changes Affecting Occupiers of Leasehold Property and Increases Their Security
by Our Legal Adviser
IT has been noticeable that in the disposal of transport units by the British Transport Commission, those that included premises have not exactly gone like wild fire. Undoubtedly many of the premiscs concerned have been leasehold, and it may be that there has seemed to prospective buyers a degree of impermanence and insecurity about them. It is important to note the farreaching changes brought about by the Landlord and Tenant Act, 1954, of which Part 2 is 'concerned with business premises.
The previous Act on the subject—that of 1927—gave a tenant of such premises in certain circumstances either the right to a new lease when his old one expired or, alternatively, compensation for what was known as "adherent goodwill." This gave rise to much difficulty in interpretation and, except for one minor purpose, this conception has disappeared with the 1954 Act.
Possibly the most important provi sions of the Act are also the simplest— those dealing with security of tenure, or, in other words, the right to continue to occupy your premises as leaseholder even when your term has expired. So far as those persons in the road haulage industry are concerned, one can generalize by saying that all tenancies will be protected except where the premises are already subject to the Rent Restrictions Acts (e.g., where there is an office let with living accommodation), or where the tenancy was originally for a period of less than three months.
Even in the latter case, if there was a term of extension or renewal in the original letting which would take it over the three months, the tenant will be protected. So also will he be if he—together with his immediate predecessors in the business—has been in occupation for over six months. This should interest buyers of transport units with premises.
Tenancy Continues The Act came into force on October 1, and so any tenant whose tenancy is not excluded as already described will be able to stay in possession when his tenancy expires. There is nothing he need do to claim this or to bring it about; it will happen automatically. by operation of law. If the tenant subsequently Wants to leave, all he has to do is to give his landlord three months' notice to expire on any quarter day—whatever
s. sort of notice he might have needed to give under the original tenancy.
The landlord can only terminate this state of affairs in one of two ways. Either he can agree a new tenancy with the tenant, or he can serve a notice on the tenant in a prescribed form which cannot give the tenant less than six months' notice. If the tenancy itself provided for termination by notice, the landlord cannot give notice to end it earlier than under the tenancy.
This new form of notice by the landlord will require the tenant to say within two months if he is willing to give up the premises. It must also state if the landlord
himself would oppose an applica ion for a new tenancy and upon what grounds. There are, in fact, only seven grounds upon which a landlord is entitled to rely.
Court Protection If the tenant does nothing in answer to the notice, he loses all his rights under the Act and will have to leave
• the premises at the end of the six months. But he has the right, if he exercises it within the period of from two to four months after the landlord's notice, to apply to the Court for a new tenancy. The Court is bound to give him one, although the terms and conditions are a matter for the Court's decision, unless the landlord successfully opposes on one of seven grounds.
These are: (1) The tenant's failure to comply with his repairing obligations; (2) the tenant's• persistent delay in paying his rent; (3) a substantial breach by the tenant of any other covenants under his lease; (4) that suitable •alternative accommodation has been offered and is available; (5) where the tenant is only a subtenant of a superior tenancy and the landlord wants to let both as a whole to his own advantage; (6) where the landlord wants to demolish or reconstruct the premises; and (7) where the landlord
wants the premises for himself either for business or as a residence unless he purchased within the previous five years.
The onus is upon the landlord, and the tenant is entitled to a new tenancy upon the Court's terms at the open-market rent" for a period not exceeding 34 years, unless the landlord proves his case. If the Court decides that it would have been satisfied • on grounds (4), (5) or (6) within the next 12' months but were not so satisfied at the time, it must make a declaration to that effect, and the tenant may then ask for that 12 months' extension within 14 days;
If a tenant holds the-premises for a fixed period of over one year, he may take the initiative in serving a notice on the landlord.requiring a new tenancy, rather than waiting for a move from the latter. • Compensation is payable under the 'Act to a tenant who is not granted A new tenancy by the Court Provided that the landlord succeeded on -grounds (5), (6) or (7). In no other case is it payable, and it is in any 'event a purely arbitrary figure, However. there is:a provision in the Act to protect tenants of dishonest landlords who obtain possession by successfully opposing on one of grounds (5), (6) or (7) with the aid of a deliberate misrepresentation or concealment of material facts, and in such cases the Court has, power to recompense the tenant for his dispossession out of the landlord's pocket.