5 Points that a Business Renting a Property Without a Written Lease Should Know

1. As long as you pay rent, have exclusive possession, and are not a licensee, your status will still be that of a tenant protected under the Landlord and Tenant Act 1954. The landlord could only regain possession if certain statutory grounds apply and even then only after having first of all served a notice for a minimum period of six months and possibly longer depending on the circumstances.

2. When the landlord serves you the notice, you would have the right to make an application to the court for a new tenancy which would be in the form of a written lease. Your application would have to be made before the expiry of the date set out in the notice which cannot be less than six months from the date of service of the notice.

3. If the notice does not rely on a statutory ground the terms that would be included in a new written lease, would be determined by the court if the parties were unable to agree the same.

4. If the landlord’s notice has relied on a statutory ground of opposition, for instance that the landlord wishes to occupy the property himself for a business, then the court would usually first of all decide whether the landlord is able to establish that ground.

5. If the landlord establishes one of the no fault grounds, such as the one referred to above, the tenant is entitled to statutory compensation from the landlord based on the rateable value of the premises. The compensation can be twice the rateable value if the tenant can establish that he has occupied the property for a continuous period of fourteen years prior to the date of the tenancy coming to an end.  For the purpose of calculating the fourteen year period any occupation by a different occupier operating the same business can be taken into account.

Please note that the purpose of this blog is to create legal awareness and not to replace the need to obtain expert professional advice. This blog has been prepared by Kumer Ali, Partner and Head of Property Litigation at Chadwick Lawrence.