Landlord and Tenant Act: 1954: What Landowners Should Know
|Topic: wind farm extension||Read Time: 8 mins|
| Landowner type:
Independent landowners | Institutional landowners
|Energy: Onshore wind|
If you’re wanting to learn more about the ins and outs of the Landlord and Tenant Act 1954, then stick with us. Not only do we cover important sections in detail, but we’ll give you hands-on advice that’ll help you out during renegotiations.
When a lease is coming to an end, there are a few different options available to landowners. And these options all depend on whether you’ve opted out of certain sections of the Landlord and Tenant Act 1954. Sections 24-28 essentially give control of the tenancy over to your current site operator. So, if you’re not sure what this act is all about or simply need a helping hand figuring out your options, we’ve got you.
Join us as we run through 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?
If you’re unfamiliar with the Landlord and Tenant Act 1954, it’s an act that’s designed to give security of tenure to occupying tenants. It essentially gives tenants the right to renew their lease when the contractual term expires.
It’s important to know that tenants only retain these rights if the landlord has NOT opted out of sections 24 – 28 of the act.
If you have opted out, landowners will have full control over what happens with their land once a lease comes to an end. So, if landlords have NOT opted out and a wind farm project comes to an end tenants on a property can still:
- Remain on the land at the end of a contractual term of a lease.
- Apply to the courts for the grant of 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.
- 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 slightly confused about which sections of the Landlord and Tenant Act 1954 are most relevant to your wind farm extension, let us fill you in.
You’ll want to focus on sections 24 to 28 of the act, and these relate to notices served by landlords and tenants. They often require tenants to refuse a new lease before the land is released back to the landlord.
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 25-27 or a new tenancy is agreed upon.
Section 25: Notice given by the landlord
This is a notice that can be given before the last year of the term of a lease, and it cannot be served after section 26. It allows the landlord to start a procedure that will end the tenancy. This can cover a new lease or the existing tenant vacating.
You need to give a minimum of 6 months’ notice and a maximum of 12 months’ notice for this to be valid. Just so you know, once you serve a section 25 a tenant cannot serve a section 26.
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 2 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 3 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 we’re talking to landowners, we always recommend opting out of sections 24-28 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 renegotiations.
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. And that’s because your site operator has no statutory right to remain.
You’ll technically have no idea whether you’ll want your tenant staying on the site indefinitely. For this reason, it’s best to keep your options open.
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.
By opting out, you can choose any of these options without needing to bow to your tenant’s wishes.
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 24-28 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 it. After this is done, you should be covered as a landlord.
If you’ve opted INTO the Landlord and Tenant Act 1954
You don’t need to completely lose your rag if you’ve opted into the Landlord Tenant Act 1954 – and you shouldn’t be embarrassed either.
Believe it or not, this is the default position of wind farm extensions. As a result, landlords aren’t always aware that their site operators have a statutory right to remain. We won’t lie to you – it’s not exactly ideal, as 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.
You can adjust rental rates to meet current market values. But if you can’t come to an agreement with your site operator, it will go to the courts to determine an appropriate rent. The new lease will have a maximum duration of 15 years if negotiations can’t be reached and more than 20 years if they can.
As we mentioned earlier, there are only a few cases where a landlord can apply to the courts for an eviction. So, if you’re dealing with unpaid rent or a breached contract, you may want to contact a team of experts to 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 you’re serving a notice to a site operator, it’s usually expected to be within 6-12 months of the lease expiring. If this time limit passes, you may simply be too late to oppose the renewal. Landlords opposing the renewal of a contract also need to state their reasons clearly. So, it’s important to consider your options ahead of time, as your reasons can’t be changed once submitted.
An Interesting Case Study
Although it’s all well and good discussing the Landlord and Tenant Act 1954, you might want to hear about it in action.
We recently worked with a client who asked for advice on their lease. They hoped to change their current site operator and wanted to know what options they had available for their wind farm. It helped that they contacted us 3 years before the end of their lease, as it meant that they could follow the strict statutory deadlines in place under the act.
But as they were able to prove that they wished to redevelop the site themselves, they were able to oppose a lease renewal. The only concern they had was proving this to the court with firm, settled, and realistic plans. Not only did they need to break down their costs, but they needed to have the funds available to carry out the work.
They’re still in the process of organising their renewal, but it proves just how important planning ahead can be. Without 3 years to play with, the tenancy would likely continue, and the opportunity to redevelop would pass.
Landowners and site operators can usually come to an amicable agreement at the end of a lease. But it’s much easier for landlords to take the reins if they’ve opted out of sections 24-28 of the Landlord and Tenant Act 1954.
This gives you the power to make decisions without necessarily considering your site operator’s wishes 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 confused 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.