Business Tenancies

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Problem: Security of Tenure: Business Landlord and Tenant.

The aim of the Landlord and Tenant Act 1954, Part II legislation, given by the Law Commission is to “give traders and professional persons a general right to retain their business premises so long as they comply with their obligations as tenants”. Therefore, in order to ascertain whether the occupiers of Robin’s flat may gain protection from the statute they must fulfil the relevant criteria stipulated in the act.

The Law Commission also stipulates that “Landlords are not unreasonably prevented from regaining possession if they want the property for their own occupation of to redevelop it” which is relevant to Robin’s intentions which may provide grounds for opposition against the tenants’ potential claims.  

However, in order for tenants to gain protection from the Landlord and Tenant Act, Part II and in order for the Landlord to rebut these claims certain criteria which may be found in statute and case law must be fulfilled.Each tenant’s situation will be examined in order to ascertain whether they are or are not eligible for protection under the LTA, 1953, Pt II.

 

Robin’s girlfriend, Marion, has been renting a flat on the fifth floor. She has been running her massage business from the flat for the last three years without having told Robin. The fact that the term exceeds 6 months means she is not exempt from protection as required in S43(3) LTA, 1953. However, the absence of Robin’s consent to the business may lead to her exemption from the protection of LTA 1954, Part II. I will examine the other criteria set out by the act in S23  before looking at whether consent is required. They are as follows:

(1) the act is applicable to tenants who occupy the premises where the business is carried out; (2) the term business includes “a trade profession or employment and includes any activity carried on by a body of persons, whether corporate or unincorporated”; that (3)  “the holding” must be occupied by the tenant for its business purposes and any part which isn’t is excluded; (4) and that consent from the landlord must be gained.

With regard to the absence of consent S23(4) “if the premises have been let for residential purposes, and thus fall within RA 1977 but during the tenancy, significant business user beings and is continued, the tenancy ceases to qualify for residential protection and is then brought within LTA 1954, Part II, apparently even if the landlord does not consent to the change of user”. Thus, Marion may still be eligible for protection despite the fact she did not gain consent unless the “business carried on was in breach of a general prohibition of use for business purposes, covering the whole premises is outside LTA 1954, Pt II, unless the immediate landlord consented to the breach”. In order to discover whether there has been a breach of the landlord’s terms, the terms which Marion abided to as a tenant must be examined.

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Marion may not, however, fulfil the requirement of S23(2) depending on how many customers Marion has: Lewis v Weldcrest Ltd [1978] 1 WLR 1107: the lodgers were not in full time occupation despite the fact that the landlord gained her main source of income through this organisation. The fact that Lewis wanted to gain protection from a different statute may be the reason why the courts chose to interpret the situation as exempt from the LTA,1954. Thus Marion may still be deemed as eligible for protection under this section. Marion is in occupation of where the business takes place as ...

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