Landlord and Tenant Act 1954: For Landowners
 Topic: independent landowners |  Read Time: 7 mins |
 Landowner type:Independent landowners | Institutional landowners |  Energy: Onshore wind |
21st July 2023If you want to learn more about the Landlord and Tenant Act 1954, you’re in the right place. I’ll cover the key sections in detail and provide practical advice for renegotiations.
When a lease is coming to an end, there are a few different options available to landowners. These depend on whether you’ve opted out of certain sections of the Landlord and Tenant Act 1954.
Sections 24 to 28 essentially give control of the tenancy to your current site operator.
If you’re not sure what this act is all about or simply need help figuring out your options, I’m here to help.
This guide will explain the Landlord and Tenant Act 1954 and how you can use it to your advantage (and avoid any pitfalls).
What Is the Landlord and Tenant Act 1954?
The Landlord and Tenant Act 1954 is a piece of legislation designed to give security of tenure to occupying tenants.
It essentially gives tenants the right to renew their lease when the contractual term expires.
However, tenants only retain these rights if the landlord has NOT opted out of Sections 24 to 28 of the act.
If you have opted out, you will have full control over what happens with your land once a lease comes to an end.
However, if landlords have NOT opted out and a wind farm project comes to an end, tenants on a property can:
- Remain on the land after the lease term expires.
- Apply to the courts for a new lease (though this is rarely necessary).
If you want to engage with a new site operator or bring your project in-house, this act can cause significant problems!
To make things even more difficult for landlords, the right to regain possession of the land only applies in certain circumstances.
This includes:
- When the landlord wants to occupy the property themselves.
- Where the tenant has a history of non-payment of rent or breaking their lease obligations.
- If the landlord intends to redevelop the land.
- The lease is very short.
The act sets out very strict guidelines that need to be followed by both landlords and tenants.
If your tenant doesn’t wish to continue with the tenancy, you can serve an appropriate notice under Section 25.
But if they do want to start a new tenancy (which would fall under Section 26), there’s very little landlords can do.
What Are Sections 24 to 28 of the Landlord and Tenant Act 1954?
If you’re unsure which sections of the Landlord and Tenant Act 1954 are most relevant to your wind farm extension, here’s a breakdown.
Sections 24 to 28 of the act focus on notices served by landlords and tenants.
These sections often require tenants to refuse a new lease before the land is released back to the landlord.q
In Basic Terms, These Sections Relate To:
Section 24: Parties haven’t agreed to interim rent and the tenancy continues
If you haven’t agreed to new terms for a tenancy, Section 24 essentially keeps the tenancy running.
This will continue unless it is ended under Sections 25 to 27 or a new tenancy is agreed upon.
Section 25: Notice given by the landlord
Section 25 allows the landlord to serve notice before the last year of the lease term.
Essentially, it allows the landlord to start a procedure that will end the tenancy. This can lead to either a new lease or the existing tenant vacating.
To be valid, you need to give a minimum of 6 months and a maximum of 12 months’ notice.
It’s important to note that once you serve a Section 25 notice, the tenant cannot serve a Section 26 notice.
Section 26: Request by the tenant to renew
If a tenant serves a Section 26 requesting a new tenancy, the landlord must renew unless they have a good reason to oppose.
If you do have a decent reason, you’ll need to confirm this within two months of receiving your tenant’s notice.
Otherwise, you’ll be required to grant a new lease under the law.
Section 27: Notice by the tenant expiring on or after a lease expiry date
Section 27 is a slightly strange one as it grants a tenancy for a certain number of years and can be ended by the tenant.
This requires the tenant to give at least three months’ notice to the landlord that they don’t wish to renew their lease.
Otherwise, it will be continued automatically.
If this notice is served by the tenant, they will no longer have the right to occupy the land after the notice expires.
Section 28: Renewal of tenancies by agreement
This section of the legislation is where the landlord and tenant agree for a future tenancy to take place until a specified date.
It should not continue past that date.
What Landowners Should Know About the Landlord and Tenant Act 1954
Whenever I talk to landowners, I always recommend opting out of Sections 24 to 28 of the Landlord and Tenant Act 1954.
It gives landlords far more control over their land (and the tenants who occupy it), which makes renegotiations far easier.
Essentially, it keeps you in the driver’s seat and gives you powerful tools to use during a wind farm renegotiation.
If you’ve opted OUT of the Landlord and Tenant Act 1954
If you’ve opted out of the Landlord and Tenant Act 1954, then pat yourself on the back. You’re in an exceptionally favourable position that gives you full control over what happens at the end of your lease.
Your site operator won’t have any statutory right to remain, which means you can decide what happens next.
However, it’s important to keep your options open. While you may not yet know whether you’ll want your tenant to stay on the site indefinitely, having control means you can make decisions based on your needs at the time.
When a lease comes to an end, landowners can choose to:
- Stay with their current site operator
- Choose a new operator
- Bring the project in-house
If a site operator wants to stay on your land, you may even be able to command a higher rent or better payment arrangement.
This would be to compensate for their ongoing use of the premises.
Just remember that the exclusion of Sections 24 to 28 of the Landlord and Tenant Act 1954 will need to be explicitly mentioned in your lease.
Your tenant will then have to sign a declaration that acknowledges this. After this is done, you should be fully covered as a landlord.
If you’ve opted INTO the Landlord and Tenant Act 1954
If you’ve opted into the Landlord and Tenant Act 1954, there’s no need to panic. Believe it or not, this is the default position for wind farm extensions, and many landlords aren’t aware that their site operators have a statutory right to remain.
While it’s not ideal, it’s important to know that you’ll need to follow your tenant’s lead (as they’ll benefit from protected business tenancies).
If you want to let your tenant stay, this would be called an unopposed renewal and you can adjust rental rates to meet current market values.
However, if an agreement can’t be reached, the matter will go to court to determine an appropriate rent.
The new lease will have a maximum duration of 15 years if negotiations aren’t successful, or more than 20 years if they are.
In rare cases, landlords can apply to the courts for an eviction. This typically only applies when there is unpaid rent or a breached contract.
If you’re in this situation, you may want to contact a team of experts to help repossess the land.
Understanding Time Limits
When it comes to the Landlord and Tenant Act 1954, there are strict timelines you need to follow.
When serving a notice to a site operator, it’s usually required to be done within six to 12 months of the lease expiring.
If this time limit passes, you may be too late to oppose the renewal.
If you intend to oppose the renewal, you’ll need to state your reasons clearly.
Keep in mind that once your reasons are submitted, they cannot be changed, so it’s important to carefully consider your options well in advance.
An Interesting Case Study
I recently worked with a client who asked for advice on their lease.
They hoped to change their current site operator, and wanted to know their available options moving forward.
It helped that they contacted us at Lumify Energy three years before the end of their lease. This meant that they could follow the strict statutory deadlines in place under the Act.
By proving that they intended to redevelop the site themselves, they were able to oppose a lease renewal.
The main concern they faced was proving this intention to the court with firm, settled and realistic plans.
They needed to break down their costs, but also needed to demonstrate they available funds to carry out the work.
They’re still in the process of organising their renewal, but this example highlights just how important planning ahead can be.
Without three years to play with, the tenancy would likely have continued, and the opportunity to redevelop would have passed.
The Takeaway
Landowners and site operators can usually come to an amicable agreement at the end of a lease.
But it’s easier for landlords to take control if they’ve opted out of Sections 24 to 28.
This gives you the power to make decisions without necessarily considering your site operator’s desire to renew.
If negotiations do break down, you can reach out to the courts for assistance. But luckily, most lease renewals never reach this point.
If you’re still unsure about the Landlord and Tenant Act 1954 (or need help considering your options), get in touch. We’ll be happy to guide you through what you can do when your lease is coming to an end.
