Commercial Law Assignment: Landlord's Rights and Tenant's Security

This commercial law assignment analyzes two scenarios involving landlord-tenant disputes and lease agreements. The first scenario examines a situation where a landlord seeks possession from two tenants, Letzone Ltd and Tara Group PLC Ltd, focusing on the application of the Landlord and Tenant Act 1954 (LTA) regarding lease renewal, tenant's failure to repair, and rent arrears. The analysis determines the landlord's rights to obtain possession and whether the tenants are entitled to compensation. The second part of the assignment compares two different lease agreements, Milnake Court and Grantley House, highlighting differences in security of tenure and repairing clauses, and the implications of the LTA. The assignment explores the security of tenure provisions, repairing obligations, and compensation rights of tenants under different lease agreements, providing a comprehensive understanding of commercial property law principles.

Running head: COMMERCIAL LAW
Commercial law
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................8
References......................................................................................................................................13

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Answer 1
Issue
The issue which has been identified in the given situation is that
1. Does the landlord has the right to obtain possession from Letzone Ltd and
what are the steps he can take to do so and whether any compensation is required
2. Does the landlord has the right to obtain possession from Tara Group PLC
Ltd and what are the steps he can take to do so and whether any compensation is required
Rules
The primary motive of part II of the securities of The Landlord and Tenant Act 1954
(LTA) is to provide a non excluded business tenant with a security of tenure exceeding the
contractual date however not interfering with operating market forces. This was done in order to
establish a fair balance between the rights of the tenant and landlord.
The tenant has the right to be provided with a new lease of the part of the holding which
is occupied by him for the business purpose at the open market rent. Under the situation where
the said tenancy is within the scope of section 23 and 23 of the Act., the tenancy had not been
contracted out under the provisions of section 38 and 38A, all notice formalities and prescribed
time limits have been complied with by the tenancy under section 24 and 26 of the LTA, any of
the statutory grounds which have been provided under section 30 have not been provided to be
violated by the landlord.

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Under the provisions of section 29(1) of the LTA it is the right of the tenant to make a
claim in relation to the renewal of the lease and obtain such renewal in case of the determination
of the existing lease. However the right is subjected to a seven statutory grounds as provided in
section 30 of the LTA.
According to Section 30 of the LTA, there are a few grounds on which a landlord may
not accept the application of a tenant for the renewal of a lease. These grounds are as follows.
Section 30(1)(a)- In situation where under the terms of the tenancy it is the obligation of
the tenant in relation to the maintenance and repair of a holding the tenant would not be provided
the grant of a renewal of anew tenancy where the holding is in a poor state in relation to the
repair which results out of failure on the part of the tenant to comply with his repair obligations.
Section 30(1)(b)- The tenant should not be provided a new tenancy where it is clear that
the tenant is persistently delaying the payment of rent which has long been due.
The other ground as provided by section 30 includes that of other form of obligation
breach, uneconomic sub-letting, suitable alternatives for accommodations, reconstruction and
demolition and occupation requirement of the owner. It has been provided through section 31(1)
of LTA that a grant of tenancy would not be provided by the court if any of the provisions under
section 30 have been triggered.
It has been provided through the case of Cunliffe v. Goodman that where the landlord
does not want to renew the lease or trigger the development clause in an existing lease must have
a genuine, settled and firm intention of giving effect to the intention.

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Provisions in relation to compensation to be provided to the tenants in case the tenancy is
brought to an end are provided through the case section 37 of the LTA. As stated in the section
the tenant has the right to claim compensation under subsection (1A), (1B) or (1C).
Subsection 1A provides for the first compensation case. According to the section where
an application has been made by the tenant via section 24(1) of the Act precluded and the court
does not have the right to provide such grant under the grounds specified under subsection 30(1)
(e) (f) and (g) of the LTA and not any other ground the tenant has the right to be paid a
compensation.
The compensation which is to be provided is stated out under subsection 37(2). There are
two conditions which if met the tenant is entitled to be provided with “the product of the
appropriate multiplier and twice the rateable value” of the property. In case the conditions are not
satisfied then “the product of the appropriate multiplier and the rateable value” of the property.
The conditions are that during the preceding 14 years of the date of termination the tenant
occupied the property for the purpose of business which the tenant carried out and where the
another occupier is the successor of the previous occupier in the last 14 years.
Thus when the claim for renewal of lease is not granted by the court the tenant is entitled
to compensation.
Under subsection 37(1B) it has been provided that
The steps which need to be taken by the landlord to terminate the tenancy of an occupier
are provided in section 4 of the LTA. According to the section the tenancy may be terminated by
the landlord by providing a notice in the prescribed form to the tenant. The notice must specify

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the date on which the tenancy is to be brought to an end. The notice must comply with the
provisions set out in Section 25 of the LTA.
The notice under the section is only effective where it is provided by the landlord to the
tenant less than six months and more then twelve months from the date where the tenancy is to
end.
In the notice the landlord has to ensure that he expressly state that in case where the
tenant is not willing to give up the tenancy then the Landlord is willing to challenge the tenant on
grounds set out by section 12 of the act and expressly state the grounds.
The notice must also specify that it is the duty of the tenant to notify within two months
of receiving the notice that whether they are willing to give up possession or not.
Application
In relation to the first issue it has been provided that unit one of the property owned by
the client is occupied by Letzone Ltd. The lease of tenancy between the client and the tenant has
already expired on December 2017. There has been no application for the renewal of lease as
provided in the scenario. It has also been noted that the tenant has failed to proceed with the
repair as the property was in bad state. It has also been provided that the tenants have stopped to
pay rent from June 2017. In the given situation the provisions of section 30 may be applied to
determine whether the court would grant a right to the tenant to renew the lease or not. It is
evident from the scenario that the client has the right to refuse the tenancy of the tenant based of
grounds 30(1)(a) and 30(1)(b) as discussed above. This is because the tenant has failed to comply
with repair obligation and has defaulted in the payment of rent as well. Thus as per section 31(1)
the grant of tenancy would not be provided by the court. Thus as per the provisions of section 37

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there is no compensation which needs to be paid to the tenant in this case as it does not fall under
the grounds of subsection 37(1A). The possession can be obtained by providing a notice under
section 4 of the LTA and as per the requirements of section 25.
In relation to the second issue it has been provided that Tara Group PLC Ltd has been
operating in unit 2 for 15 years and do not want to relocate. In the given situation the provisions
of section 30(1)(f) of the Act will also be applicable as the property is needed for reconstruction.
Here it has to be proved that the landlord has a genuine, settled and firm intention of giving
effect to the intention of reconstruction. Here the landlord has already obtained the plain and thus
the intention is clear. Thus the client can provide notice to the tenant to vacate the unit as per
section 4 and 25 of the LTA. In the given situation it is clear through the application of section
37(1A) that the tenant is entitled to be paid compensation. This is because there is no fault of the
tenant and the landlord wants to trigger clause 30(1)(f).
The amount of compensation which is to be paid to the tenant would be based upon the
provisions of section 37 of the Act. There are two conditions which if met the tenant is entitled to
be provided with “the product of the appropriate multiplier and twice the rateable value” of the
property. In case the conditions are not satisfied then “the product of the appropriate multiplier
and the rateable value” of the property. In the given situation the condition provided by section
37(3) is satisfied. Thus the tenant is entitled to the product of the appropriate multiplier and twice
the rateable value of the property as compensation.
Conclusion
In the first issue possession has to be obtained by providing notice and the tenant is not
entitled to any compensation

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In the second issue possession has to be obtained by providing notice and the tenant is
entitled to compensation which is the product of the appropriate multiplier and twice the rateable
value of the property.

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Answer 2
The differences between the leases are as follows
Security of tenure of the leases
After analyzing both the leases it has been identified that there is a significant difference
between the leases in relation to the security of tenure clause. In the Milnake Court lease (hereby
identified as lease 1) provisions in relation to a security of tenure clause have been provided
expressly. It has been stated that the lease comes without a security of tenure clause. It has been
provided through the lease that if the other party wishes to carry sign the lease they would not be
provided with any right to extend their stay as to the premises when the lease ends. The tenant
would have to leave the premises unless the landlord would on his discretion extend the lease.
Further where the land lord has taken the decision of extending the lease the tenant would not be
provided with the right of challenging the rent affixed by the landlord to the new lease in court. It
is also provided that the other party is recommended to take legal advice in relation to giving up
the right. It is also provided expressly that the lease is excluded from the provisions of the LTA
thus the statutory security of tenure is not applicable on this lease.
On the other hand in the lease of Grantley House (hereby referred as lease 2) there is no
express provisions provided in relation to the security of tenure provided to the tenant. Thus in
the given situation the provisions of the LTA would be applicable. This means that there is an
implied right of the tenant of the lease to be provided with a security of tenure. Thus the landlord
in the given situation has to extend the lease of the tenant once the lease has ended or the tenant
has the right to obtain the order from court. The landlord may only not renew the lease under the
seven provisions which are provided in section 30 of the LTA. In addition it is the duty of the

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Landlord to provide compensation to the tenant in case the lease is not extended where there is
no fault committed on the part of the tenant under the provisions of section 37 of the LTA.
Repairing clauses
Both lease one and leases two have different provisions when it comes to repair. In the
first lease the tenant is require to keep the premises in substantial and good condition and repair
and replace those fitting which are no longer in position to be repaired. The repair clause has
further detailed that painting which is required in relation to the premises. It has been stated that
the premises requires to be painted with the best quality paint from time to time and decorated in
a proper manner which would reasonably satisfy any surveyor. There are a few repair in which
have to be completed as per this lease within three months. These include replacement of missing
states, examining the roof if the building while replacing the states, retrieving all slipped states
from the roof, replacing the rotten frame and window panel, cleaning of sanitary fitting and
repairing the leakage radiator. All cost in relation to such repair and decoration has to be borne
by the tenant. The tenant is also liable to pay the cost which has been incurred by the owner
towards the redecoration of the building’s exterior.
A section of repair clause is also present in lease two but is much smaller and less
detailed as compared to the clause in lease one. The repair clause in this lease is not
distinguished under a different heading but is incorporated as a part of general duty of the tenant.
The lease imposes an obligation on the tenant through which he is liable to contribute and pay on
demand of the landlord a due or ratable proportion of the expense and cost which is incurred for
maintenance and repair of the building including cleaning, lighting and fencing of the common
premises. This provisions in relation to the common premises is not present in lease one. There

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are painting provisions in this lease which are slightly different from lease one. Both leases
provide for the use of the best quality paint. However it has been provided in this lease that the
painting work has to be done every third year and a few other types of painting every 5 year,
these provisions are not present in lease one. It is the duty of the tenant under lease two to ensure
substantial and good repair as and when required as by a reasonable person. It is also the duty of
the tenant to ensure that the premises is kept clean at all times. Under this lease it is also the duty
of the tenant to ensure that the land which is not covered by any building is kept tidy and clean
at all times and there is no rubbish on the land as well as it is free of weeds. I relation to repair
this lease provides a right to the landlord to check that all reasonable repairs have been made
from time to time and in relation to such right to be provide access to the premises. It is also the
duty of the tenant to ensure that they comply with all repair requirements which have been
notified to the tenant by a notice from the landlord.
Alteration clauses
Alternations clauses are present in both lease one and lease two. In lease one it is
specifically provided that the tenant is not allowed to commit waste on the premises, to make any
alternation or change to the premise’s external structure without obtaining due consent from the
landlord and alter or cut any pipe which are connected to the other premises. In case where there
is any alternation done by the tenant it would be the liability of the tenant to restore the position
which the premises was in prior to the lease or to pay the cost for the same to the landlord.
In the same way like that of repair an alternation clause in this lease is not under a heading.
Under the

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Lease the tenant is not allowed to erect any form of new building on the said premises. In the
same way as lease one the tenant is not allowed to make any alternation to the premises without
obtaining due consent from the owner. Internal alternations also require consent of the landlord
however the consent is not to be withheld unnecessarily by the land lord. All const of which is to
be required from the landlord has to be taken in writing. This provisions is not present in lease
one.
Alienation clause
A specific alienation clause is present lease one under clause 5.8. as per this clause the
tenant is not allowed to assign or underlet part in relation to the property, not to hold the property
on trust of any other party, not to underlet the whole or charge the whole premises without taking
consent form the landlord and not to assign the premises without taking consent from the
landlord. The consent is totally on the discretion of the owner. In the same way as the first lease
the second lease also does not allow the tenant to assign the premises where due consent form
the land lord has not been taken. There is not much difference between the alienation clause in
the two leases other than the clause in lease one being in much more detail and describing ever
aspect leaving no scope for any contingency.
Any rent review provisions
In lease one it is clearly provided that where the lease is allowed to be renewed by the
landlord there is no claim which can be made by the tenant in relation to the alternation of lease.
The tenant is not provided any right whatsoever to withhold the rent from the landlord and the
rent is to be paid in the provide bank account of the employer.

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On the other hand in lease two has a yearly rent of 105000 which is to be paid in advance
and the tenant is also not allowed to male any deduction to the rent in any situation. The tenant in
this case is also required to pay the proportionate amount of what the landlord pays from time to
time as a premium. Thus is lease two there is a additional clause in relation to the rest which is
that of premium payment which is not provided in lease one.

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References
Cunliffe v Goodman [1950] 2 KB 237
The Landlord and Tenant Act 1954