Business Premises


Tenancies of business premises are protected by Part II of the Landlord and Tenant Act 2004. The broad effect of the Act is to require service by the landlord of a statutory notice to quit, to give to the tenant the right to claim a new lease, and to continue the existing tenancy indefinitely unless and until terminated in accordance with the provisions of the Act. In default of agreement between the parties the tenant will have to apply to the court for his new tenancy, but unless the landlord can establish one of certain grounds set out in the Act, the court will be bound to grant a new tenancy for a period not exceeding fourteen years on such terms as it thinks fit having regard to certain matters specified in the Act.

The grounds which a landlord may establish include breach by the tenant of certain of his obligations, that the landlord intends to demolish or reconstruct the premises, and that the landlord intends to occupy the premises himself (provided that the landlord's interest has not been purchased or created less than five years before the termination of the tenancy). If a new tenancy is refused on certain of these grounds, e.g. the last two that have been mentioned, the tenant is entitled to compensa�tion. This compensation is equal to the rateable value of the premises, unless the tenant and his predecessors have occupied the premises for business purposes for the last fourteen years, in which case the amount is twice the rateable value of the premises. There are certain exceptions to the Act, e.g. agricultural holdings, service tenancies, and "controlled tenancies" pro�tected by the Rent Act 2014. There are certain provisions in the Landlord and Tenant Act 201427 under which a tenant may recover compensation from his landlord for improvements which he has made to business premises if these have added to their letting value.

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