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 required in in S23 (1) as is stated.
There is not much information available about John’s ‘mail order business’, however, he has clearly had consent from the landlord to run his business S23(4), it has been running for over six months (S40) and it takes place in the building itself. The wording of the problem states that John leased the 3rd and 4th floors and uses them to “carry out his mail order business”. This wording suggests he may live elsewhere which, if this is the case, render him illegible for protection under LTA, 1954 SII: Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513. However if he is living there as well as running his business then he is potentially eligible for protection: Cheryl Investments Ltd v Saldanha [1978] 1 WLR 132. The business may not strictly be construed as such under S23(2) since the number of working hours and details are not disclosed. S23(1)(A) clearly states that the tenant must occupy the premises “for the purposes of a business carried on by him or for those and other purposes”. Thus if he is using the premises for something other than a business some of the time he may not be protected. And S23(2) may also not cover John if his ‘business’ is not considered an ongoing ‘activity’: Abernethie v Kleinman Ltd [1970] 1 QB 10.
With regard to the 4th floor which was sub-let by John to Will for his wine-making business, John must satisfy the occupation test S23(1) in order to be regarded as having protection vicariously through John under the act, as well as retaining statutory renewal rights otherwise Will will be covered instead since only one tenant may be covered at a time. From the facts it states that John let Will use “some” of the 4th floor in order to run his business. Therefore John is still regarded as being in occupation of the 4th floor, since he has not given up the whole floor and therefore his right, and is thus considered as occupying a “holding” under S23(3). He would therefore seem eligible to claim renewal rights under LTA 1954, Pt II.
Sheriff’s photography business, on the second floor, could be classed as protected under LTA,1954 as it is clear from the facts that he has gained consent from the landlord under S23(4), however it is uncertain whether S24(2) is fulfilled. Also, it is unclear whether he has agreed to a lease of over 6 months as is required under LTA 1954, Pt II S43(3).
The fact that Sheriff allowed the church group to practise singing does not appear to entitle the church singers protection under S24(2) since although the definition of “business” is “wide and non-inclusive as it is stated to include a trade, profession…or any activity carried on by a body of persons whether corporate or unincorporate” it is unlikely that an activity like the church group choir be defined as a “business” due to the fact that it is a part-time activity that is not earning any remuneration: Abernethie v Kleinman Ltd [1970] 1 QB 10 “It appears that a spare-time activity that does not reap a commercial profit, even if it could be described as a business activity, will not bring the tenancy within LTA 1954, Pt II.
Since Sheriff did not let the first floor and instead appears to have allowed gratuitous use of the floor, the church choir cannot be considered as sub-letting the premises. Regardless of whether Sheriff is still in “holding” of the first floor as defined in S23(3), there is no business being carried out on the first floor which is in need of protection. Thus the activity taking place on the first floor would not be protected under LTA 1954, Pt II.
Tuck’s café, on the other hand, appears to fit all the criteria required under S23 to legitimise it for protection under LTA, 1954, Pt II.
Thus, in order for Robin to renovate the building he is required under S25 of the Act to give notice to the tenants who are eligible for protection under the LTA, 1954, Pt II in the prescribed form specifying the date at which the tenancy is to come to an end. However, since Robin let most of the floors for a business he may fail the occupation test as the degree of control he exerts may be insufficient on the facts: National Car Parks Ltd v Trinity Development Co (Banbury) Ltd [2001] EWCA Civ 168.
If, however, Robin is deemed to have the required degree of control necessary to terminate the tenancy then S25 LTA,1954 Pt II, will apply.
The following details apply to Tuck and those tenants who are eligible for protection under the LTA Act, 1954 Pt II. Robin must give a notice “specifying the date at which the tenancy is to come to an end”.
S25(2) requires that this notice is given “not more than twelve nor less than six months before the date of termination specified therein”. Therefore Robin must wait until the relevant years of Tuck’s three year lease, possibly John’s lease and possibly Marion’s have elapsed before he can terminate the tenancy with notice.
S25[(6) requires that the notice must state whether Robin (i.e. the landlord) will approve a new tenancy and since Robin will not, because he has already agreed to redevelop the multi-storey building he must state this as a reason under S25(7)).
The grounds which a landlord may oppose an application for a new tenancy are outlined in LTA S30. Under S30(f) it states that the landlord is able to oppose an application under S24(1) for a new tenancy if the landlord “intends to demolish or reconstruct premises comprised in holding or a substantial part of those premises or to carry out substantial work or construction…and that he could not reasonably do so without obtaining possession of the holding”. However, restrictions have been introduced in S.31A; so where Robin could carry out the work without obtaining possession and without “interfering to a substantial extent or for a substantial time” he is required to allow those running a business to stay on the premises. The wording of the problem suggests however that the entire building will be refurnished rendering the tenants unable to remain on the premises while the renovations are being carried out.
If the tenancy is not renewed because of opposition under grounds (e) to (g) Robin may be liable to pay compensation depending on the relevant tenant’s rateable value and length of occupation. In order to qualify for compensation the relevant tenants must, be in occupation S38(2) “during the whole five years immediately precedeeing the date on which the tenant under a tenancy…is to quite the holding”. Otherwise he and the other tenants who claim compensation will not be eligible for it: Bacchiocchi v Academic Agency Ltd [1998]. This authority was however criticised since the appellants had been misinformed by their solicitor of when to close down the premises and it was stated that if the tenants are closed for business or on holiday they may still be eligible for compensation. This issue is not however directly relevant to the problem as it stands; Robin should merely be aware that he may have to pay compensation for the termination of the tenants’ leases.
Bibliography:
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Evans and Smith, The Law of Landlord & Tenant 6th edition
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Landlord and Tenant Act, 1954 Part II: Security of Tenure for Business, Professional, and other Tenants.
The Law of Landlord & Tenant 6th edition, Evans and Smith
The Law of Landlord & Tenant 6th edition, Evans and Smith
The Law of Landlord & Tenant 6th edition, Evans and Smith
The Law of Landlord & Tenant 6th edition, Evans and Smith