Opposing Lease Renewal on the Grounds of Redevelopment

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Jennifer Hartley - Associate

5 minutes reading time

The Landlord and Tenant Act 1954 (the Act) was introduced after the end of World War 2 to provide business tenants with security of tenure.

The Act provides business tenants with the right to continue in occupation of the premises after the end of the contractual term on the same terms as their current lease, as well as a right to acquire a new lease.

A tenancy that is protected by the Act continues unless terminated by one of the methods prescribed under the Act.

Where the Act applies, it is more difficult for a landlord to recover possession of the property as they have to rely on one of the statutory grounds. 

This can have significant implications if a landlord wishes to redevelop.

To terminate a protected tenancy, a landlord must serve a notice under section 25 of the Act setting out the date for the proposed termination date (which must not be less than six months and no more than 12 months from the date of the notice) and the statutory grounds they are relying upon to oppose the grant of a new lease.

There are many different statutory grounds under section 30(1) of the Act, including that the landlord has an intention to redevelop.

Any statutory ground stipulated in the notice must be put forward in good faith.

A landlord should not oppose a tenant's lease for tactical reasons.

This would simply put the landlord at risk of costs in any subsequent litigation.

There are mandatory and discretionary grounds of opposition. 

Discretionary grounds are at the court's discretion as to whether or not a new lease should be granted.

Where a mandatory ground is being relied upon, the court must refuse to grant a new lease if that ground is satisfied.

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Opposing lease renewal on the grounds of redevelopment

I am a landlord and wish to redevelop, but my tenant has a protected tenancy

Ground (f) of section 30(1) of the Act is the statutory ground a landlord can rely upon if they want to redevelop their property.

Under this ground, a landlord, on the termination of the current tenancy, must intend to:

  • Demolish or reconstruct the premises comprised in the tenant's holding or a substantial part of those premises; or
  • Carry out substantial construction work on the premises comprised in the tenant's holding or part of the premises.

It is the landlord's responsibility to prove that it has the requisite intention to redevelop the premises, and that intention must be proven at the trial date.

However, it will bolster the landlord's case if the evidence can be gathered to support its intention to redevelop the property earlier than then.  

To establish the requisite intention, a landlord must show it has a firm and settled intention to carry out the works.

The landlord needs to show that it has moved "out of the zone of contemplation" and into the "valley of decision".

Therefore, the more comprehensive the plans are, the better the landlord's prospects of success.

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I am a landlord and wish to redevelop but my tenant has a protected tenancy

How can a landlord evidence intention?

A landlord can evidence intention by collating:

  • Plans, drawings, specifications, planning applications, permissions, relevant consents.
  • Proof of decision-making.
  • Obtaining tenders for works.
  • Obtaining building contracts.
  • Obtaining vacant possession of other parts of the proposed development.

The landlord, in addition, must show that it has a reasonable prospect or a "real chance" of carrying out the works and that the proposals are something that a reasonable landlord would take.

The evidence of ability can be shown with permissions, consents, proof of finance and contracts, for example.

The proposed works must be started within a reasonable time at the end of the tenancy.

It does not need to be carried out within a prescribed time period.

However, the courts have held three to six months after a court order terminating the tenancy agreement is reasonable.

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How can a landlord evidence intention

Statutory compensation

If a landlord successfully opposes a lease renewal under ground (f) of section 30(1) of the Act, the tenant will be entitled to compensation on vacating the property.

This is calculated at the rateable value or two times the rateable value if the tenant has been in occupation for 14 years or more.

If the site involves many tenants, then this can involve large sums for the landlord, and so this should be factored into the project.

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Statutory compensation

Tactical points for a landlord to consider

Landlords should seek professional advice early, particularly if a tenant serves a section 26 notice requesting a new tenancy agreement.

This ensures that the landlord does not miss the opportunity to serve a counter-notice within the two-month deadline.

If the landlord fails to serve the counter-notice, then the landlord will be unable to oppose the grant of the new lease.

Landlords should obtain advice if there are plans to sell the property to a developer, which is conditional on vacant possession.

The landlord should obtain all evidence early on.

A tenant could push the landlord to court quickly if it believes the landlord cannot prove the ground and the necessary intention to redevelop.

The landlord should consider relying on other grounds of opposition if they assist, particularly those where statutory compensation would not be payable.

Suppose a tenant accepts that a landlord can satisfy ground (f) at trial.

In that case, the parties may be able to negotiate an early surrender of the lease, subject to the landlord paying the tenant the compensation it is entitled to.

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Tactical points for a landlord to consider

Tactical points for a tenant to consider

Tenants should seek advice early on if the landlord is opposing a new tenancy on the basis of ground (f) of section 30(1) of the Act.

The tenant would be advised to request documentation early on to test the landlord's intention to redevelop the property and look for weaknesses in the landlord's proposals.

The tenant should consider the landlord's desired timescales to redevelop the property and the need for vacant possession.

The tenant should then consider whether it is better to litigate or agree to vacate the property.

The tenant should consider the impacts on their business of relocation and the practicalities to their continued trading.

The tenant may therefore consider a higher premium for agreeing to the surrender.

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Tactical points for a tenant to consider

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If you need legal advice regarding opposing a lease renewal on the grounds of redevelopment, then Myerson Solicitor's Property Litigation team can help:


Jennifer Hartley's profile picture

Jennifer Hartley


Jennifer has 4 years of experience acting as a Property Litigation solicitor. Jennifer has specialist expertise in commercial and residential landlord and tenant disputes, lease renewals, forfeiture, dilapidations, rent arrears, and residential possession.

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