Since the 1950s business tenants occupying leasehold premises for their business have enjoyed security of tenure under the Landlord and Tenant Act 1954. If the ‘54 Act applies, when a current lease expires, the tenant can call for a new lease providing he follows the correct procedures.

His request can be opposed by the landlord on various grounds such as his intention to redevelop, needing the premises for his own use, or if the tenant has been a 'bad tenant'.

It is an arrangement which has worked well, balancing more or less the needs of landlord and tenant. If the request goes ahead the rent under the new lease is the open market rent, and other terms will be similar to the old lease.

However the equilibrium can shift on new lettings particularly if terms agreed are not ‘market standard’ in which case landlords can exclude the Act. Many procedures under the '54 Act have been revamped.

Under the old rules landlords had to obtain a court order to exclude (“contract out of”) the security of tenure provisions of the '54 Act. Newbury County Court were particularly efficient with these paper exercises, however, it incurred a court fee of £130.

Under the new procedures a court order is no longer required. Instead the landlord must serve notice on the tenant in prescribed form, advising him how he would be affected if he agrees to exclude the Act. The tenant must be given 14 days notice before the grant of the lease and must sign a declaration that he has read and understood the notice.

However if the parties wish to press ahead without waiting for the 14 day cooling off period, the tenant must take the declaration to another solicitor and swear to its contents. We find that most people prefer to take this route. It is a shame that this extra hurdle was introduced particularly where the tenant is being advised by a solicitor who is bound to explain the effects of excluding the '54 Act.

However, on balance, we feel these new rules are an improvement on the court order procedure which was rather artificial, required a fair bit of paper work and incurred court fees.

For more information contact Malcolm Poynter on 01635 521212 or malcolm.poynter@clmlaw.co.uk