Landlord and Tenant Act 1954: Analysis of Lease Agreements

This report provides an analysis of lease agreements under the Landlord and Tenant Act 1954. It discusses the two types of tenancies - contracted-out and protected - and the rights of tenants in each category. The report also examines the implications of Section 25 of the Act, which allows landlords to terminate new leases. Additionally, it considers the impact of default in payment by an occupier on a commercial property lease. The conclusion highlights how these legal considerations can affect the value of a property portfolio.

Property Law & Practice

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1. Commenting on the legal significance of the existing arrangements pertaining to the laws of
landlord and tenant......................................................................................................................1
2. Giving recommendations to ABC Investment Ltd..................................................................4
REFERENCES................................................................................................................................8

INTRODUCTION
English property law is highly associated with the acquisition, sharing as well as
protection of property in England & Wales. Further, in England, law mainly imply for four main
domains or areas such as real and personal property, trust as well as UK intellectual property
law. There are several laws and legislation which are introduced by UK authorities with the
motive to offer protection to both landlord and tenant. Law of Property Act 1925 provides deeper
insight to the parties of tenancy arrangement about the laws that need to be followed for ensuring
smooth relationship. The present report is based on the case situation of ABC investment Ltd that
purchased or invested money in the small town centre commercial property. Hence, such
property portfolio includes row of two storey retail and office units that are located in the Main
Street of Salchester. In this, report will provide deeper insight about the about the arrangements
which take place between the landlord and tenant as per law. Besides this, it also depicts the way
that needs to be followed for making improvement in the property portfolio as per the tenancy
schedule.
TASK
1. Commenting on the legal significance of the existing arrangements pertaining to the laws of
landlord and tenant
In law, tenancy agreement implies for the contract which takes place between the
landlord and tenant. Such agreement contains information regarding the terms and condition of
rental agreement. As per the legal aspects, tenancy agreements are usually put in place before
letting out property.
In UK, there is a separate arrangement for protected tenancy as per Rent Act 1977. Such
Act governs the law pertaining to regulated tenancies and provide tenant with both security and
right in relation to faire rent. By doing assessment, it has found that after the introduction of
Housing Act (1988) protected tenancies are rarely undertaken by the tenants. However, with the

motive to take the benefits of greater security still some tenants prefer to consider protected
tenancy arrangements. It also has been assessed from evaluation that when protected tenancy
comes to an end then statutory tenancy is created if tenant remains in an occupation. Specifically,
there are mainly two types of protected tenancies such as controlled and regulated.
Part 11 of Landlord and Tenant Act 1954 (L&T) presents that a tenant who has occupied
premises for the business purpose has right in relation to renewing lease at the end of term. It
comes under the category of protected lease. Protect tenancy provides security to the tenant in
relation to tenure and offers right pertaining to fair rent (LTA 1954 protected tenancy, 2017). On
the other side, under contracted out lease, as per the laws and legislations specific set of legal
process must be followed and carried out before lease is completed. Laws pertaining to
contracted out lease clearly show that landlord must give a warning notice to the tenant when
arrangements are recognized as contracted out. Such warning notice provides deeper insight to
the tenants that they are entering in the leasing arrangement without any security of tenure.
Hence, considering such tenancy arrangement it can be depicted that tenant is given with the 14
days in relation to taking decision whether they are giving up the right of renewal or not.
In the context of landlord, contracted out lease arrangement is highly significant and
preferred by the concerned authorities. Moreover, as per L&T Act, tenant usually accountable for
the new lease at the expiration of current one. However, under contracted out tenancy, updated
terms and conditions are inserted except rent because such aspect is highly based on current
market value.
Grounds for regaining possession
Considering Landlord and Tenant Act 1954 Act there are several reasons or grounds on
the basis of which the owner of the property can demand for possession. According to the
concerned law and legislation, landlord can demand for property either for development or doing
own business. In addition to this, when tenant makes default in making payment of rent or not
complying the lease arrangement then landlord can sue for regaining possession of property.
Exclusions pertaining to security of tenure

On the basis of L&T Act, security of tenure can be excluded by the agreement when
landlord wishes to carry out a redevelopment project. Along with this, such aspect is also
applicable when the term of lease is short.
Section 25 of L&T Act
In accordance with such section of L&T Act (1954), landlord may terminate tenancy by
applying or giving notice to the tenant in the prescribed format. Under this, landlord also needs
to specify data from which on which tenancy will come to an end (Section 25, Landlord and
Tenant Act 1954, 2017). However, if landlord wants to terminate tenancy then there is a
requirement to give notice before 6 months and mot more than 12 months of the period.
Section 26 of L&T Act
This section of L&T Act presents that by giving notice tenant can request for a new
tenancy agreement when the old one is terminated. Section 26 of the concerned Act clearly
specifies date on which existing lease agreement comes to an end. By keeping in mind the rules
of such section it can be mentioned that tenant cannot apply for the new lease before the agreed
terms (A Guide to the Landlord and Tenant act 1954, 2017). Along with this, tenant also cannot
apply for the lease renewal after the notice served by the landlord as per section 25. Further,
section 26 of L&T Act presents that existent lease is not comes to an end before the normal
expiry period.
Ending a commercial property lease early
Break clause lays emphasis on the inclusion official date that is agreed by both tenant
and landlord. On the basis of such clause, out of the two concerned parties, one can break lease
duration without facing penalty. In this, tenant is required to give notice to the landlord while
taking decision in relation to breaking clause (Ending a commercial property lease early, 2017).
On the other side, L&T Act presents that landlord can use break clause only when tenant agrees.
Further, L&T Act (1954) presents that as a landlord one can end the lease when tenant fails to
pay rent or meet other lease obligations.

2. Giving recommendations to ABC Investment Ltd
Given case situation presents that there are mainly two tenants that has made agreement of
lease on the basis of contracted out arrangement. Tenants who fall into such category include
Screws and Nails Tools Ltd and Stephen Modem. In the context of Screws and Nails Tools Ltd,
current rent and rental value accounts for £7000 & £8500 pa. However, rent of six months
currently in arrears and such floor has been sub-let with no lease. Hence, considering the laws or
rules of L&T Act, it can be stated that on the basis of default in making payment of rent on time
ABC investment Ltd can demand for repossession. On the basis of concerned Act, tenant has
history in relation to making non-payment of rent for the period of 6 months. Along with this,
under one lease contract premises are sub-letting by the tenant. Thus, referring such aspect,
business entity or owner of ABC Investment Ltd can demand for or regain possession.
Moreover, as per the tenancy agreement tenant is obliged to make payment of rent on time. Thus,
as per L&T Act on the behalf of rent arrears and sub letting ABC Investment Ltd can claim for
possession and would become able to enhance the efficiency of concerned portfolio. Case of
Barclays Wealth Trustees (Jersey) Ltd v Erimus Housing Limited presents that under
contracted out tenancy there is an implied assumption. On the basis of such assumption, after the
expiration of lease landlord and tenant do negotiation for new lease.
 Given case situation presents that occupier of 11 Main Street is Numbers Plus Ltd. Hence,
accountants have taken such office unit on lease for the period of 3 years on the basis of FRI
terms and conditions with an effect from 1/09/2015. In this, FRI implies for the specific lease
arrangement where all the expenses in relation to insurance and repairing are borne by the
tenant. On the basis of L&T Act, in the case of multi-let building landlord make payment of
repairs in relation to the common parts. Hence, with the motive to develop estate office ABC
Investment Ltd wants to gain possession of such property earliest. Currently, lease
arrangement with Numbers Plus Ltd comes under the category of protected tenancy. As per
the cited condition lease period will be completed on 31/08/2018. In this regard, referring
L&T Act (1954) it can be depicted that ABC investment ltd has legal or statutory right for
gaining possession. On the basis of case 9, landlord can apply for possession by stating the
aspect that property is required for himself or herself. Thus, by taking into account the aspect
of discretionary cases contained in Part 1 of schedule 15 of Rent Act (1977) it can be

depicted ABC investment Ltd can demand for possession and would become able to establish
office within the suitable time frame.
 On the basis of given case situation, occupier of 9 Main Street is Doggy Doos Charity Shop.
Such office unity is used by such charity shop or unit for general goods. In July 2013, license
is granted to the concerned authority for the period of one year. In this, rent which was paid
by the concerned authority accounts for one peppercorn and rental value implies for one
peppercorn. Here, one peppercorn means a token or a nominal rent such as £1 respectively.
Such kind of rent usually takes place where premium has been paid out for a lease. This kind
of rental arrangement and nominal collection is considered for maintaining better relationship
as landlord-tenant. In such case, licensee wants to stay as its outlet is highly successful.
License may be served as a permission which offers right or permission to the licensee in
relation to occupying a land for the less period of time usually between six and twelve
months (Tenancy Agreement or License to Occupy, 2017). Rules of L&T Act presents that if
property owner does not collect even £1 for the period of 12 months then ownership right is
transferred to the tenants. In order to avoid such situation earlier contract was made on the
one peppercorn arrangement (Peppercorn rent, 2017). Thus, keeping all such aspects in mind
it can be depicted that ownership rights are still in the hand of landlord. Hence, ABC
Investment Ltd can possess property by giving notice to the concerned authority because
period of license is over and ownership rights are still in the hand of such firm.
 Along with this, in the context of property, 13 Main Street that is occupied by the firm
namely ‘Recruiting Today’, section 25 of L&T Act was considered. In accordance with
section 25 of L&T Act, before the 7 months period when tenancy comes to an end notice was
served by the landlord in relation to granting a new tenancy at a rent of £15000 per annum.
As specified in the case that new tenancy will start from 1/8/2017 so it assumed that the old
one ended on 31/7/2017. This aspect clearly shows that specific time limit prescribed in L&T
Act was followed by the landlord. However, within the one month tenant objected in relation
to the new tenancy arrangement or agreement. Thus, it can be presented to ABC investment
Ltd that it can use vacant property and would become able to execute the predetermined plan.
 Case summary of 15 Main Street presents that office was rented out to lawyers Direct on
FRI terms for the period of 5 years is available to them for car parking project. As per the
given case scenario rent is paid by the tenant on time. Hence, on the basis of such aspect

client cannot claim for or regain possession. Client wants to demolish this property for
constructing car parking area. Along with this, referring the portfolio plan it can be depicted
that vacant position is required as soon as possible. Thus, for maximizing the value of
portfolio there is a need to gain possession by giving compensation to the innocent party for
contractual breach.
 In the case situation of retail unit such as 3 Main Street, Helena’s Hair & Beauty ABC
Investment Ltd will be liable for giving compensation to the tenant. Moreover, concerned
tenancy arrangement is regarded as protected one in which only time of the essence review
clause was included. Case situation entails that from 1/1/2012 retail unit was taken on lease
for the period of 9 years on FRI terms and conditions. Along with this, it is mentioned in the
lease contract or arrangement that three yearly rent reviews will be done. However, in this,
no clause was included by the concerned parties in relation to breaking lease. Thus, it can be
depicted that concerned authority or landlord is obliged to give compensation to the tenant.
However, landlord can argue on the basis of the aspect that property is required for the
developmental purpose.
 As per 7 main street cases lease is provided to the tenant for the period of 3 years from
1/4/2013. It entails that lease ended on 31/3/2017. Hence, considering section 26 and
protected lease arrangement tenant has applied for new tenancy or renewal of the same.
Hence, in this, landlord has opportunity in relation to rejecting the new agreement pertaining
to lease applied by the tenant. Along with this, under the case of 7 Main street, can argue on
the ground that security of tenure can be excluded from agreement when there is an intention
pertaining to landlord. Thus, by taking into account all such aspect client namely ABC
Investment Ltd can claim or demand for possession.
 Apart from this, in relation to commercial property of 5 Main Street, lease was granted to
Stephen Modem for the purpose of PC repairs. Under such contracted out tenancy, default in
payment was made by the occupier. Now, property is vacant due to both internal and external
disrepair as well as rent & business rates arrears. Concerned Act entails that on the ground
that on the ground of rent arrear or default in meeting obligations (Regulated Tenancies,
2017). However, current the property is already vacant so it can be used for the purpose of
developmental plan.

Hence, by following all the above recommendations client such as ABC Investment Ltd
would become able to maximize the value of overall property
CONCLUSION
By summing up this report, it has been concluded that property laws offers benefits or
protection to both landlord and tenant. Besides this, it can be inferred that specifically there are
mainly two types of tenancies that is chosen by the tenants such as contracted out and protected.
It has been articulated that under contracted out tenancy, tenant gives up right pertaining to the
tenure. On the other side, in the case of protected tenancy, tenant can remain in occupation by
after the ending of lease period. Further, tenant also has right in relation to apply in court for the
new lease. It can be summarized from the report that ABC Investment Ltd can enhance the value
of property portfolio by demanding retail units and offices for the development purpose. Along
with this, it can be stated that section 25 of L&T Act offers right to landlord in relation to
terminating new lease.

REFERENCES
Online
A Guide to the Landlord and Tenant act 1954. 2017. [Online]. Available through:
<https://www.penningtons.co.uk/news-publications/archive-news/2012/a-guide-to-the-
landlord-and-tenant-act-1954/>.
Ending a commercial property lease early. 2017. [Online]. Available through:
<https://www.gov.uk/terminating-a-commercial-property-lease-early>.
LTA 1954 protected tenancy. 2017. [Online]. Available through:
<https://uk.practicallaw.thomsonreuters.com/7-107-5816?
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1>.
Peppercorn rent. 2017. [Online]. Available through:
<https://uk.practicallaw.thomsonreuters.com/9-202-2741?
transitionType=Default&contextData=(sc.Default)>.
Regulated Tenancies. 2017. [Pdf]. Available through:
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/
11445/138295.pdf>.
Section 25, Landlord and Tenant Act 1954. 2017. [Online]. Available through:
<https://uk.practicallaw.thomsonreuters.com/4-508-2654?
transitionType=Default&contextData=(sc.Default)>.
Tenancy Agreement or License to Occupy. 2017. [Online]. Available through:
<http://www.ehlsolicitors.co.uk/tenancy-agreement-licence-occupy/>.