Q. I have agreed to take a 5 year lease on some retail premises and the Landlord has indicated that the lease “will exclude the Landlord and Tenant Act 1954”. What does this mean?
Under the 1954 Act, subject to a few exceptions, if you are a business tenant then, at the end of the lease, there are only limited grounds (some of which involve the payment of compensation) upon which the landlord can require you to vacate.
However, there is a procedure whereby the “security of tenure” provisions of the 1954 Act can be excluded by agreement between the parties at the start of the lease. If they are excluded then, unless you agree with the landlord terms for your continued occupation, you must vacate at the end of the lease and no compensation will be payable.
In many instances this is not a problem for the tenant but, in the retail sector, it can be. During the lease, customers will automatically come to know where you are and associate you with particular premises. Consequently if you have to move at the end of the lease, there will not only be disruption and cost to your business but there would also be nothing to prevent the landlord letting the premises to a similar business which then ends up taking your customers.
By David Gordon
