As you will be aware from TMCP guidance in respect of granting non-residential leases to third parties of Methodist properties and the “best practice” heads of terms, at point 1 it states the lease will exclude the security of tenure provisions of Part II of the LTA54 and that requirement is stated as a non-negotiable term.
The LTA 54 provides that a tenancy to which the LTA54 applies shall not come to an end unless determined in accordance with the terms of the LTA54.
The LTA54 applies to the tenancy under which the property in question is occupied by the tenant for the purposes of a business carried on by him or for business purposes (and other purposes). A business includes a trade, profession or employment and includes such an activity carried on by a group of people whether incorporated or not.
Where a tenancy has the benefit of the security of tenure provisions of the LTA 54, in essence, the tenant is entitled to the grant of a new lease upon the terms to be agreed or determined by a Court in the absence of agreement, essentially upon the same terms as the current lease.
A landlord can only oppose the grant of a new tenancy if it can establish one of the seven statutory grounds to refuse a renewal. The statutory grounds include fault based grounds such as non-payment of rent or breach of covenant, and non-fault based grounds, for example, redevelopment or landlord’s own occupation.
The form of notices required under the LTA54 are generally in prescribed form and there are timescales applicable to those notices which are strict.
There are certain tenancies to which the LTA 54 does not apply; these include: –
- an agricultural holdings tenancy or farm business tenancy;
- a tenancy arising by reason that the tenant was the holder of an office or employee, provided the tenancy is terminable upon the association of the office or employment; and
- a tenancy for a term of not more than six months without any expressed provision for renewal.
It is also possible to specifically “contract out” of the security of tenure provisions by following a procedure consisting of the service of a notice and completion of a declaration or statutory declaration before entry into the tenancy or any agreement to grant the tenancy, which is the process required by TMCP to ensure that you, as managing trustees are able to recover possession of your property at the end of the term of a lease.
The above is only a brief summary and outline of the main provisions of the LTA 54, but if you require any further information or have any specific questions, please do not hesitate to contact us.
