A leading commercial property lawyer is warning landlords about the hurdles they face when taking back possession from a tenant with a protected lease – and urged them to seek legal advice to avoid falling foul of the law.
The Landlord and Tenant Act 1954 was introduced after the Second World War to redress the relationship balance between landlords and tenants in commercial premises. The Law Commission concluded a consultation into the Act earlier this year and is now considering the responses it has received.
However, Phil Hunt, a senior associate in the Commercial Property team at Worcestershire law firm mfg Solicitors, said: “Many now believe the pendulum has swung too far in favour of tenants and landlords can find it difficult to remove protected tenants.
“There have been calls to review this 1950s piece of legislation, with some arguing that it no longer reflects the modern market.”
Mr Hunt said four models were being considered. The first would see the Act effectively abolished, leaving tenants with no security of tenure, while the second option involves both parties “opting in” to a tenure agreement. The third option of a “contracting out” regime would retain the status quo and give tenants security of tenure by default, while the fourth option would make security of tenure mandatory, offering the highest form of tenant protection.
He added: “The other major issue being considered is the type of tenancies which should be covered by the Act. The Law Commission has been looking at whether certain tenancies should be excluded depending on the use of the property, the duration of the tenancy, the size of the property, the location, or the rent payable.
“For now, it still remains the case that landlords who intend to redevelop or regain possession of their property at the end of a lease term should take legal advice as early as possible. Discussing your next step before you serve a notice can assist in understanding the options.
“Equally, landlords looking to let a commercial property should consider the consequences of whether or not a lease excludes the right to security of tenure. This is often a key negotiation point in heads of terms, and discussing future plans with a solicitor before finalising heads of terms could assist in avoiding potential issues later on.”
Readers looking for further information from the firm’s Commercial Property team can visit www.mfgsolicitors.com or email [email protected].
mfg Solicitors has offices in Worcester, Birmingham, Kidderminster, Bromsgrove, Ludlow and Telford.