A Year Of Important Cases About The Landlord And Tenant Act 1954

• Published date: 19 January 2022
• Subject Matter: Real Estate and Construction, Landlord & Tenant - Leases
• Law Firm: Russell-Cooke Solicitors
• Author: Paul Greatholder

The Landlord and Tenant Act 1954 applies to the vast majority of commercial property lettings.

The primary purposes of the Act are to extend a tenant's lease beyond the contractual termination date unless and until certain statutory notices have been served, and (once those notices have been served) to give a tenant of business premises a right of first refusal to a new lease. If the parties cannot agree between themselves whether the tenant should have a new lease and/or what terms it should contain, then generally a Court will decide those points for them.

If a tenant seeks a new lease then a landlord needs to decide promptly - within two months of the request - whether it agrees in principle that the tenant should be entitled to do so.

The received wisdom is that where a landlord does not oppose the grant of a new lease in principle to its tenant, then the vast majority of subsequent claims are resolved by way of negotiation. In short, very few ensuing 'disputes' make it all the way to the courtroom. However, 2021 has been the exception that proves the rule, and we have seen a number of 'uncontested' lease renewal judgments reported.

What have they decided and/or told us?

Firstly, does the LTA 1954 even apply? In the case of TFS Stores Ltd v The Designer Retail Outlet Centres (Mansfield) Ltd and others the Court of Appeal gave useful guidance on the process under the 1954 Act, often called 'contracting out', whereby a landlord and tenant can exchange certain notices and declarations which - if prepared correctly - have the effect of excluding the operation of the 1954 Act. Unfortunately there are sometimes errors in the contracting out process and in the TFS Stores case the tenant (TFS) argued that a failure to follow the correct procedures for six of its leases meant that those leases were within, not outside of, the protection of the 1954 Act. The Court of Appeal did not agree with TFS's arguments, and held that on the facts of this case (a) solicitors who were acting on the grant of the new leases had authority to accept service of the necessary notices on behalf of the tenant; (b) that the tenant's retail director, although not a main board director, had authority to sign the necessary paperwork on behalf of the tenant; and (c) where declarations given by the tenant used formulaic wording which referred to unspecified lease commencement dates (eg where there was to be an agreement for lease) that did not invalidate the contracting out process.

The...