Form 2 - New Section 25 Notice: landlord opposing renewal

If you receive one of these, then you’ve a potential fight on your hands in order to remain in your business premises. For all the following reasons, you may find yourself up a creek, without a paddle! At least having seen the notice, you’ll be aware of its significance.

Advice

Under the Landlord and Tenant Act 1954 (“the Act”) which governs most commercial leases, there are 2 forms of Section 25 Notice available for a landlord to use. Form 2 will only be used where your landlord wants you out and isn’t prepared to negotiate any extension to your current lease.

Good reason

If your landlord is going to rely on Form 2, then they must set out their reasons in the notice why they’re not prepared to allow you to stay on and have a new lease. The Act lays down specific grounds that a landlord can rely on if they want you out. These include a failure on your part to comply with the covenants in your lease, the landlord wanting the premises in order to demolish or reconstruct or the landlord wanting the premises for their own use.

Tip

The minute the expiry date in the notice has passed, the landlord can apply to the court for an order that your lease shouldn’t be renewed. If this happens, so that you’re not in a dilemma over what your next move should be, as soon as you receive the notice, start doing your homework on the validity, or otherwise, of the landlord’s grounds.

Note. Unless your landlord’s relying on one of the “fault” grounds in the notice, e.g. you’ve been persistently late paying the rent, then you’re entitled to compensation if you’re forced to leave. The amount is based on the rateable value of your property and the length of time that both you and any previous tenants have been in occupation.