My landlord wants to redevelop; what can I do?

Business relocation

This news may come as quite a shock and may suggest that you only have a few months to relocate your business. In fact, all may not be lost – there may be an opportunity to stay for a longer period or to be granted a new tenancy when the redevelopment is complete.

Alternatively, there may be invalidities in the notice which render it redundant, or, although the notice may be valid, the landlord may fail to satisfy the wider evidential requirements which must be satisfied if the issue progresses to court.

The Landlord and Tenant Act 1954 is quite technical and the redevelopment powers within it can allow both the landlord and the tenant to employ strategies and tactics to suit their own purposes – these will have a bearing upon when you vacate or whether you have to vacate at all.

What does the notice say?

If a landlord wants to terminate a commercial lease that is protected by the Landlord & Tenant Act 1954, it can only do so if it satisfies certain prescribed criteria. The first stage in that process is serving a notice upon the tenant which sets out which ground of the Act it is relying upon and the date by which it requires possession of the property.

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The notice must state a date which is at least six months, but no more than 12 months, after the date that it is served. If the expiry date is outside these parameters, the notice will be invalid. You will have to make a tactical decision as to whether to notify the landlord that it is invalid at that stage, or whether your needs are better served by keeping quiet and allowing the landlord to continue under the illusion that the notice period is counting down.

The notice should be scrutinised for other errors. If the landlord has described any of the parties incorrectly, mis-described the property or served the notice in a way that is not permitted by the lease, these could all be errors that might invalidate the notice.

The statutory grounds

The notice must set out what statutory ground the landlord is relying upon. The most likely grounds in this situation are redevelopment) or an intention to occupy the property itself.

Both of these grounds have legal definitions which require the landlord to prove each and every element of them at court. For a tenant, this means that there are numerous areas where you can apply pressure to a landlord if they don’t yet have everything in place to move the development forward, for instance, if the funding is still to be acquired, planning permission has not yet been granted or if there are numerous other tenants who also need to vacate.

Other considerations

Subject to the length of time that the business has been running at the property, you may be entitled to compensation at 1 or 2 times its rateable value. If you are intending to vacate in accordance with the wishes of the landlord, then you will need to be sure that you don’t do anything to jeopardise your right to that compensation. You should also be mindful of the impact that the landlord’s plans may have on your dilapidation liabilities.

Next steps

It is important that you seek legal advice immediately upon receipt of the notice. If our solicitor has the opportunity to review the notice and the lease at the earliest opportunity, it will maximise the time available for you to make a decision about how to move forward.

Please contact Natalie Minott at [email protected] or on 01223 581 441.