What rights do you have if your landlord wants you out?
by Niall McGann of thePublican.com's legal team of experts from London solicitors Joelson Wilson.
My colleague Deborah McCallum wrote about the renewal of leases of licensed premises on this site in February of this year. (Click here for the full article.)
In the majority of cases, the landlord is happy to renew the lease, often subject to minor variations. But what if the landlord wants you to "sling your hook" when you wish to stay put?
If your lease is protected under the Landlord and Tenant Act 1954, your landlord has to rely on specific grounds as to why the renewal should be refused. These grounds are:
- The landlord's wish to demolish, reconstruct or undertake substantial construction. This is the most common ground of all. Increasingly, non-profitable licensed premises are being converted, often into flats. Any reconstruction has to be substantial in nature and the landlord must be able to prove a true intention to carry out the works.
The tenant's failure to repair. Essentially, if your landlord can prove that you are failing in your obligation to repair the premises your bid to renew your tenancy could be thwarted.
Persistent delay in paying rent. If your landlord has been placed in difficulty or has suffered expenditure in recovering your rent on a number of occasions he will have a justifiable reason to resist the grant of a new lease. If your rent arrears are sufficiently serious, you also run the risk of having your landlord bringing proceedings to forfeit your lease.
Substantial breaches of other tenant obligations. Breaches of planning regulations and sub-letting without permission are both reasons for refusing renewal.
The provision of alternative accommodation. If your landlord offers you an alternative premises on similar terms, then this could be a ground to refuse a renewal for your existing premises. However, the landlord has to show that the goodwill, nature and class of the business will remain.
Complex sublettings. This is a rare, highly technical ground.
The landlord's desire for own occupation. Your landlord would have to show that he either intended the holding to be used as his place of business or as his residence. To use this ground he must have owned the property for at least five years.
If a court decides in favour of your landlord and your occupation comes to an end, he is obliged to pay you compensation. This is provided that such a provision is not excluded in your lease.
It is important to note that if your tenancy is for more than five years, your right to compensation cannot be refused.
In most cases, the compensation you are entitled to is the same as the rateable value of your premises.
It is possible to receive double compensation if the building has been occupied as a licensed premises and you have also been in occupation for a period of 14 years immediately preceding the termination of the current tenancy.
While the above hopefully provides an indication of your rights, they have been greatly simplified.
The renewal of business tenancies is a highly technical area and I certainly would not recommend resisting any attempt by your landlord to refuse a grant of a new lease without specialist legal advice.
Niall McCann is a member of the litigation team at Joelson Wilson and advises on property litigation issues.