The Landlord and Tenant Act 1954 confers security of tenure on business tenants. At the end of the term, either party can serve a notice terminating the existing tenancy and apply to the court for the grant of a new lease.
The Act prohibits the parties from ending a lease prematurely. Consequently, neither party can serve a notice that terminates a lease before it expires or could be brought to an end by a notice to quit. In Tekegac v Emmott [2008] PLSCS 186, the county court had to consider the effect of a tenant’s notice requesting a new lease commencing on the last day of the term of its current lease.
The landlord argued that the tenant’s notice was invalid because it requested a tenancy that would begin while the tenant’s existing lease was still ongoing. The county court rejected the landlord’s argument. It ruled that it was unjustified to assume that the tenant was asking for a new tenancy to start at the beginning of the last day of its existing lease. The tenant had merely asked for a new lease to begin as soon as its current lease had expired.
The judge took a purposive approach to the provisions laid down in the 1954 Act. He ruled that any reasonable recipient of the notice would have realised that the tenant wanted a new lease commencing on the expiry of the contractual term. The tenant had made a minor mistake that was of no practical significance for the purposes of the statutory scheme. The 1954 Act requires tenants to serve a request for a new lease to ensure that landlords are aware of their wishes and can consider and respond to their request.
However, it would be unwise to assume that tenants will be able to invoke this undoubtedly sensible decision to rescue notices containing a more serious error. In Bristol Cars Ltd v RKH Hotels Ltd (in liquidation) [1979] 2 EGLR 56; (1979) 251 EG 1279, the Court of Appeal ruled that the tenant’s request for a new lease commencing nine months early was incorrect, and allowed the notice to stand only because the incoming landlord had applied for an interim rent and waived the defect in the tenant’s notice. Consequently, the new landlord was unable to start the renewal process afresh and object to the renewal of the lease.
The problem in Tekegac arose because the tenant’s 12-year term was expressed to run “from 9 December 1994”. The tenant thought that the lease expired on 8 December 2006 and requested a new tenancy commencing on the following day. However, unless any contraindications appear in the lease, the normal rule is that a term that runs “from” a specified day excludes that day. Consequently, the lease ended at midnight on its anniversary and not at midnight on the previous day. Law reports are littered with cases arising from the application of this rule. Its proper application will save clients unnecessary anxiety, time and legal costs.
Allyson Colby is a property law consultant
