Points to bear in mind for leases excluded from the Landlord and Tenant Act 1954
DEALING WITH AN UPCOMING LEASE EXPIRY - A GUIDE FOR TENANTS
What should you do if your lease is coming to an end and you do not want to stay at the property?
If you are a tenant under a lease excluded from the 1954 Act and the expiry date is approaching, there is no need to serve any notices on your landlord if you do not wish to stay at the property. Your tenancy will come to an end automatically on the date that the term of the lease expires.
It is good practice to make early contact with your landlord to make clear your intentions and consider any reinstatement and repair etc. obligations as early on as possible. You should also ensure that the property will be free of people and your possessions at the end of the term. If you remain at the property after the lease expires, without the agreement of the landlord, you will be trespassing and the landlord could simply change the locks in order to obtain possession (depending on whether the premises include any residential elements). You may also be liable for further sums in respect of your occupation of the property if you do not leave on or before the lease expiry date.
What should you do if your lease is coming to an end and you want to stay at the property?
If you are a tenant under a lease excluded from the 1954 Act and your lease is coming to an end soon but you wish to stay at the property, you should approach your landlord as soon as possible to try to agree the terms of a new lease.
If you remain at the property after the lease expires, without the agreement of the landlord, you could be trespassing and the landlord could simply change the locks in order to obtain possession (depending on whether the premises include any residential elements).
It may be possible to agree with your landlord for you to remain at the property after the lease expires and whilst negotiations for a lease are ongoing. If so, then you are likely to be a tenant at will. However, this will not give you any security of occupation as, under a tenancy at will, the landlord can terminate your tenancy at any time. See what will happen if you do nothing below.
DEALING WITH AN UPCOMING LEASE EXPIRY - A GUIDE FOR LANDLORDS
What should you do if a tenant’s lease is coming to an end and you want them to vacate at the end of the term?
If you have a tenant occupying under a lease excluded from the 1954 Act and you want it to vacate at the expiry of the lease term then it is usually sensible to contact them to confirm this and give them the contact details of the person who can make logistical arrangements for the handover of keys, fobs etc.
You may also wish to carry out an inspection prior to lease expiry in order to ascertain the state and condition of the property and possibly instruct a surveyor to prepare a Schedule of Dilapidations. You should carefully check the terms of the lease and any ancillary licences in case there is a requirement to give a specific period of advance notice for the tenant to reinstate any alterations, for example.
If the tenant remains in occupation after lease expiry then you should take steps to obtain possession as quickly as possible to avoid the tenant from being able to raise any arguments regarding a new implied agreement having been created. It is very important that you do not demand or accept any rent or other sums due from the tenant for any period after the date of expiry of the lease to avoid any new agreement being implied.
What should you do if a lease is coming to an end and you want the tenant to enter into a new lease?
If a lease excluded from the 1954 Act is close to expiry and you are keen for the tenant to stay then you should enter into negotiations for a new lease as soon as possible. Ideally, you should enter into the new lease prior to the expiry of the existing tenancy to avoid any uncertainty as to the tenant’s status after lease expiry. If there is any delay, it is possible to allow the tenant to remain as a tenant at will but the arrangements for this should be carefully communicated because of the risk of creating a new periodic tenancy.
FOR BOTH LANDLORDS AND TENANTS
What will happen if you do nothing prior to lease expiry and the tenant remains in occupation of the property?
Where a tenant holds over after the expiry of a lease excluded from the 1954 Act, and depending on the circumstances, a new periodic tenancy or a tenancy at will may be created. If a periodic tenancy is created then the tenant could acquire the protection of the 1954 Act and the landlord will then only be able to obtain possession if it establishes one of the statutory grounds of opposition. If only a tenancy at will has been created (e.g. where there are active ongoing negotiations for a new lease), then this should be terminable “at will” by the landlord or tenant at any time.