Common Questions Regarding Leases

I have a commercial tenant and the lease is coming to an end. What should I do as the Landlord?

In short, you should review your lease and see what repairing obligations the Tenant has before the lease comes to an end. If you feel that the Tenant will be in breach of any of the repairing obligations, then you should carry out an inspection and instruct your property agent or qualified surveyor to do this.

You should then decide if you wish to bring the lease to an end or are willing to grant a new lease on different terms. If the lease is contracted into the Landlord and Tenant Act, you will need to serve a Section 25 Notice to either bring the existing lease to an end, or to start a new lease on different terms.

I have received a Section 25 Notice from my Landlord, what should I do?

You should review your tenancy and see if your Landlord is willing to grant you a new business tenancy on expiry of your old one, or if your Landlord has refused to grant a new lease.

If you Landlord wishes to renew the tenancy and you are not happy with the terms proposed, then you can seek to agree a new tenancy before the lease expires. If you cannot agree on new terms, then you can either extend the period for negotiations to complete or if your Landlord refuses to extend the time period for the expiry of the Section 25 Notice, then you will need to make an application to the Court.

If your landlord has refused a new lease, then it must set out the grounds for the refusal. If you disagree with these ground, then you can oppose the grounds for discontinuing the lease and make an application to the Court.

You may be entitled to compensation if your Landlord has given you notice on non-fault grounds, which may mean you are entitled to compensation dependant upon the length of time you have occupied the premises.

What are dilapidations?

Dilapidations relate to a Tenant’s liability for failure to breach repairing, decorating or reinstatement requirements when the lease comes to an end.

The Landlord should serve a schedule of dilapidations either shortly before the lease comes to an end, or within 3 months following its termination.

The Tenant may have a liability to the Landlord for any breaches of the lease.

We can advise either Landlords or Tenants when a lease is coming to an end and provide advice as to what action should be taken to protect your position.

What is forfeiture?

Normally in a lease there will be grounds set out when the Landlord can forfeit the Lease (bring the lease to an end). This will normally be in conjunction with failure of the Tenant to either to pay the rent on time, or carry out repairs on time.

This is a complicated area of law, and it is important that Landlords do not waive the right to forfeit the lease because they have taken actions to treat the lease as if it continuing (e.g. reinsuring the building, reach an agreement to waive rental arrears).

Housing – What is a HMO?

A HMO is a House of Multiple Occupancy. A property becomes a HMO if there are at least 3 people living at the property who make up more than one household and they share the toilet, bathroom and kitchen with the other tenants.

A household for these purposes are either a single person or members of the same family who live together.

Do I need a licence to rent out a HMO?

If your property is a HMO then it is mandatory that you obtain a licence from the local authority in order to rent the property out.

Can I serve my tenant with a section 21 notice?

The statutory requirements for a section 21 notice are that the tenant has been served with the Energy Performance Certificate, gas safety certificates (where applicable) and the How to Rent Guide at the beginning of the tenancy and when updated. If a deposit was taken from your tenant then this must also have been protected in a government approved scheme and the prescribed information served on your tenant.

Can I still issue a Section 21 Notice if I haven’t served the prescribed documents?

You may still be eligible to serve a Section 21 Notice if the Energy Performance Certificate, gas safety certificate and How to Rent Guide have not been served but you must first make sure to serve these on your tenant before issuing a Section 21 Notice. However, if you did not have a valid gas safety certificate in force at the time the tenancy began, you may be prevented from serving a Section 21 Notice.

Can I serve a Section 8 Notice on the ground of rent arrears?

Ground 8 allows you to serve a Section 8 Notice if your tenant is in at least 2 months rent arrears at the date the notice is served. Your tenant must remain in 2 months rent arrears at the date of the Court hearing for the Judge to award possession.

What notice period do I have to give for a Section 8 Notice?

There are various different notice periods depending on the grounds being relied upon. For example, the notice period if using ground 8 for rent arrears is 2 weeks.

Does my tenant have to leave after I serve a Section 21 or Section 8 Notice?

Your tenant may not be in a position to leave by the date given in the notice. If they remain in the property after the notice period has expired, you can issue proceedings at the Court to seek an Order for Possession requiring the tenant to leave.

Does my tenant have to leave after I have an Order for Possession from the Court?

Your tenant still may not be in a position to vacate the property by the Court ordered date. If they remain in the property following this date, you can request a Warrant for Possession to get a bailiff to attend the property.

Can I use the accelerated possession procedure?

If you have served your tenant with a Section 21 Notice and all statutory requirements have been met, you will be able to use the accelerated possession route to issue proceedings.

Benefits of the accelerated possession procedure.

The accelerated route is a paper-based exercise in which a Judge will look at the application made and the documents enclosed to determine whether the requirements have been met and may make a decision on granting possession without a hearing. The key benefit of this is it saves the costs of preparing for and attending a court hearing and can often be a quicker route. However, many courts experience delays due to backlog and workloads so some delays can still be expected.

Can I still use a Section 21 Notice?

Although the government have suggested plans to abolish Section 21 Notices, this has not yet come into force and Section 21 Notices can still be validly served on tenants to seek possession.

Benefits of a Section 8 Notice.

Issuing a Section 8 Notice means that if Court proceedings do become necessary, you are able to seek recovery of any outstanding rent arrears as part of the same claim. Using a Section 21 Notice and the accelerated route means you are not able to recover rent arrears and these will need to be pursued through a separate claim which may take longer and incur additional costs.