The effect of section 38(2) of the Landlord and Tenant Act 1954 on contractual exclusions to the right to compensation upon the landlord bringing the tenancy to an end
My client’s sole concern is compensation, and the effect of section 38(2) of the Act, which appears to invalidate a contractual exclusion once he has chalked up five years of business occupation. Assuming that the landlord keeps to his timetable, how would my client stand if he were allowed to hold over as a tenant at will for a further few months?
The effect of section 38(2) of the Landlord and Tenant Act 1954 on contractual exclusions to the right to compensation upon the landlord bringing the tenancy to an end
Q My client occupies a workshop under a periodic tenancy to which the 1954 Act applies. He has been there for just over four years. The agreement purports to exclude the right to compensation he would otherwise have on the tenancy being brought to an end on grounds (e) to (g) of section 30(1). The landlord wants to redevelop, and is about to take steps with a view to terminating the tenancy in about nine months’ time.
My client’s sole concern is compensation, and the effect of section 38(2) of the Act, which appears to invalidate a contractual exclusion once he has chalked up five years of business occupation. Assuming that the landlord keeps to his timetable, how would my client stand if he were allowed to hold over as a tenant at will for a further few months?
A He would still be stuck with the exclusion. You apply section 38(2) by looking backwards from “the date on which the tenant… is to quit the holding”. It was held by Pumfrey J in London Baggage Co (Charing Cross) Ltd v Railtrack plc (No 2) [2001] EGCS 6 that the relevant date is the statutory termination of the tenancy, not the date of actual departure.
