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Whereas
(ii) the National Assembly for Wales, (iii) the Law Commission, and (iv) such other persons as he considered appropriate;
(b) as a result of that consultation it appeared to the First Secretary of State that it was appropriate to vary part of his proposals, and he undertook such further consultation with respect to the variations as appeared to him appropriate;
(ii) the extent to which this Order removes or reduces one or more burdens, or has other beneficial effects for persons affected by the burdens imposed by the existing law, makes it desirable for this Order to be made;
Now therefore the First Secretary of State, in exercise of the powers conferred by sections 1 and 4 of the Regulatory Reform Act 2001, hereby makes the following Order: - Citation, commencement and interpretation 1. - (1) This Order may be cited as the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. (2) This Order extends to England and Wales only. (3) This Order shall come into force at the end of the period of 6 months beginning with the day on which it is made. (4) In this Order, "the Act" means the Landlord and Tenant Act 1954[3]. Amendment of the Landlord and Tenant Act 1954 2. The Act shall be amended as follows. Amendments to section 24 3. - (1) In section 24(1)[4] (continuation of business tenancies), for the words "provisions of section twenty-nine of this Act, the tenant under such a tenancy may apply to the court for" substitute the words "following provisions of this Act either the tenant or the landlord under such a tenancy may apply to the court for an order for the grant of". (2) Insert the following subsections after section 24(2) -
(2B) Neither the tenant nor the landlord may make such an application if the landlord has made an application under section 29(2) of this Act and the application has been served. (2C) The landlord may not withdraw an application under subsection (1) above unless the tenant consents to its withdrawal.".
Amendments to section 25
(7) A notice under this section which states that the landlord is opposed to the grant of a new tenancy to the tenant shall not have effect unless it also specifies one or more of the grounds specified in section 30(1) of this Act as the ground or grounds for his opposition. (8) A notice under this section which states that the landlord is not opposed to the grant of a new tenancy to the tenant shall not have effect unless it sets out the landlord's proposals as to -
(b) the rent to be payable under the new tenancy; and (c) the other terms of the new tenancy.".
Landlord's application to terminate tenancy Order by court for grant of new tenancy or termination of current tenancy 29. - (1) Subject to the provisions of this Act, on an application under section 24(1) of this Act, the court shall make an order for the grant of a new tenancy and accordingly for the termination of the current tenancy immediately before the commencement of the new tenancy. (2) Subject to the following provisions of this Act, a landlord may apply to the court for an order for the termination of a tenancy to which this Part of this Act applies without the grant of a new tenancy -
(b) if the tenant has made a request for a new tenancy in accordance with section 26 of this Act and the landlord has given notice under subsection (6) of that section.
(3) The landlord may not make an application under subsection (2) above if either the tenant or the landlord has made an application under section 24(1) of this Act.
(b) if not, it shall make an order for the grant of a new tenancy and accordingly for the termination of the current tenancy immediately before the commencement of the new tenancy.
(5) The court shall dismiss an application by the landlord under section 24(1) of this Act if the tenant informs the court that he does not want a new tenancy.
Amendments to section 30
29A. - (1) Subject to section 29B of this Act, the court shall not entertain an application -
(b) by the landlord under section 29(2) of this Act,
if it is made after the end of the statutory period.
(b) where the tenant made a request for a new tenancy under section 26 of this Act, immediately before the date specified in his request.
(3) Where the tenant has made a request for a new tenancy under section 26 of this Act, the court shall not entertain an application under section 24(1) of this Act which is made before the end of the period of two months beginning with the date of the making of the request, unless the application is made after the landlord has given a notice under section 26(6) of this Act.
Amendment to section 25 Amendment to section 23 13. After section 23(1) (tenancies to which Part 2 applies) insert -
(b) where the tenant is a company, by a person with a controlling interest in the company,
shall be treated for the purposes of this section as equivalent to occupation or, as the case may be, the carrying on of a business by the tenant.
Amendments to section 30
(1B) Subject to subsection (2A) below, where the landlord is a company and a person has a controlling interest in the company, the reference in subsection (1)(g) above to the landlord shall be construed as a reference to the landlord or that person."
(2) After section 30(2) insert -
Amendment to section 34
(b) where the tenant is a company, a person with a controlling interest in the company.".
Amendment to section 42
Rent while tenancy continues by virtue of section 24 18. For section 24A[8] (interim rent) substitute -
24A - (1) Subject to subsection (2) below, if -
(b) the tenant of such a tenancy has made a request for a new tenancy in accordance with section 26 of this Act,
either of them may make an application to the court to determine a rent (an "interim rent") which the tenant is to pay while the tenancy ("the relevant tenancy") continues by virtue of section 24 of this Act and the court may order payment of an interim rent in accordance with section 24C or 24D of this Act.
(b) the tenant made a request for a new tenancy under section 26 of this Act at a time when he was in occupation of the whole of that property for such purposes and the landlord did not give notice under subsection (6) of that section,
and the landlord grants a new tenancy of the whole of the property comprised in the relevant tenancy to the tenant (whether as a result of an order for the grant of a new tenancy or otherwise).
(b) the landlord or the tenant shows to the satisfaction of the court that the terms of the new tenancy differ from the terms of the relevant tenancy to such an extent that the interim rent under that subsection is substantially different from the rent which (in default of such agreement) the court would have determined under section 34 of this Act to be payable under a tenancy which commenced on the same day as the new tenancy and whose other terms were the same as the relevant tenancy.
(4) In this section "the relevant rent" means the rent which (in default of agreement between the landlord and the tenant) the court would have determined under section 34 of this Act to be payable under the new tenancy if the new tenancy had commenced on the appropriate date (within the meaning of section 24B of this Act).
(b) to the rent payable under any sub-tenancy of part of the property comprised in the relevant tenancy,
but otherwise subsections (1) and (2) of section 34 of this Act shall apply to the determination as they would apply to the determination of a rent under that section if a new tenancy of the whole of the property comprised in the relevant tenancy were granted to the tenant by order of the court and the duration of that new tenancy were the same as the duration of the new tenancy which is actually granted to the tenant.
(b) to the rent payable under any sub-tenancy of part of the property comprised in the relevant tenancy,
but otherwise subsections (1) and (2) of section 34 of this Act shall apply to the determination as they would apply to the determination of a rent under that section if a new tenancy from year to year of the whole of the property comprised in the relevant tenancy were granted to the tenant by order of the court.
(b) either -
(ii) the landlord and tenant agree not to act on the order,
the court on the application of the landlord or the tenant shall determine a new interim rent in accordance with subsections (1) and (2) above without a further application under section 24A(1) of this Act.".
Compensation for refusal of new tenancy
(1A) The first compensation case is where on the making of an application by the tenant under section 24(1) of this Act the court is precluded (whether by subsection (1) or subsection (2) of section 31 of this Act) from making an order for the grant of a new tenancy by reason of any of the grounds specified in paragraphs (e), (f) and (g) of section 30(1) of this Act (the "compensation grounds") and not of any grounds specified in any other paragraph of section 30(1). (1B) The second compensation case is where on the making of an application under section 29(2) of this Act the court is precluded (whether by section 29(4)(a) or section 31(2) of this Act) from making an order for the grant of a new tenancy by reason of any of the compensation grounds and not of any other grounds specified in section 30(1) of this Act. (1C) The third compensation case is where -
(b) either -
(ii) such an application is made but is subsequently withdrawn.".
(2) In section 37(2)[10] -
(b) in paragraph (a), after the word "satisfied" insert "in relation to the whole of the holding".
(3) After section 37(3) insert -
(3B) Where section 44(1A) of this Act applies, the compensation shall be determined separately for each part and compensation determined for any part shall be recoverable only from the person who is the owner of an interest in that part which fulfils the conditions specified in section 44(1) of this Act.".
(4) In section 37(4), for the words "the circumstances mentioned in subsection (1) of this section" substitute "a compensation case".
37A. - (1) Where the court -
(b) refuses an order for the grant of a new tenancy,
and it subsequently made to appear to the court that the order was obtained, or the court was induced to refuse the grant, by misrepresentation or the concealment of material facts, the court may order the landlord to pay to the tenant such sum as appears sufficient as compensation for damage or loss sustained by the tenant as the result of the order or refusal.
(ii) without making such an application; and
(b) it is made to appear to the court that he did so by reason of misrepresentation or the concealment of material facts,
the court may order the landlord to pay to the tenant such sum as appears sufficient as compensation for damage or loss sustained by the tenant as the result of quitting the holding.".
Amendments to section 38 21. - (1) In section 38(1) (restrictions on agreements excluding provisions of Part 2)[11] for "subsection (4) of this section" substitute "section 38A of this Act". (2) Omit section 38(4). Agreements to exclude sections 24 to 28 22. - (1) After section 38 insert -
38A. - (1) The persons who will be the landlord and the tenant in relation to a tenancy to be granted for a term of years certain which will be a tenancy to which this Part of this Act applies may agree that the provisions of sections 24 to 28 of this Act shall be excluded in relation to that tenancy. (2) The persons who are the landlord and the tenant in relation to a tenancy to which this Part of this Act applies may agree that the tenancy shall be surrendered on such date or in such circumstances as may be specified in the agreement and on such terms (if any) as may be so specified. (3) An agreement under subsection (1) above shall be void unless -
(b) the requirements specified in Schedule 2 to that Order are met.
(4) An agreement under subsection (2) above shall be void unless -
(b) the requirements specified in Schedule 4 to that Order are met."
(2) Schedules 1 to 4 to this Order shall have effect. Provision of information 23. For section 40 substitute -
40. - (1) Where a person who is an owner of an interest in reversion expectant (whether immediately or not) on a tenancy of any business premises has served on the tenant a notice in the prescribed form requiring him to do so, it shall be the duty of the tenant to give the appropriate person in writing the information specified in subsection (2) below. (2) That information is -
(b) whether his tenancy has effect subject to any sub-tenancy on which his tenancy is immediately expectant and, if so -
(ii) for what term it has effect (or, if it is terminable by notice, by what notice it can be terminated); (iii) what is the rent payable under it; (iv) who is the sub-tenant; (v) (to the best of his knowledge and belief) whether the sub-tenant is in occupation of the premises or of part of the premises comprised in the sub-tenancy and, if not, what is the sub-tenant's address; (vi) whether an agreement is in force excluding in relation to the sub-tenancy the provisions of sections 24 to 28 of this Act; and (vii) whether a notice has been given under section 25 or 26(6) of this Act, or a request has been made under section 26 of this Act, in relation to the sub-tenancy and, if so, details of the notice or request; and
(c) (to the best of his knowledge and belief) the name and address of any other person who owns an interest in reversion in any part of the premises.
(3) Where the tenant of any business premises who is a tenant under such a tenancy as is mentioned in section 26(1) of this Act has served on a reversioner or a reversioner's mortgagee in possession a notice in the prescribed form requiring him to do so, it shall be the duty of the person on whom the notice is served to give the appropriate person in writing the information specified in subsection (4) below.
(b) if he is not, then (to the best of his knowledge and belief) -
(ii) for what term his or his mortgagor's tenancy has effect and what is the earliest date (if any) at which that tenancy is terminable by notice to quit given by the landlord; and (iii) whether a notice has been given under section 25 or 26(6) of this Act, or a request has been made under section 26 of this Act, in relation to the tenancy and, if so, details of the notice or request;
(c) (to the best of his knowledge and belief) the name and address of any other person who owns an interest in reversion in any part of the premises; and
(5) A duty imposed on a person by this section is a duty -
(b) if within the period of six months beginning with the date of service of the notice that person becomes aware that any information which has been given in pursuance of the notice is not, or is no longer, correct, to give the appropriate person correct information within the period of one month beginning with the date on which he becomes aware.
(6) This section shall not apply to a notice served by or on the tenant more than two years before the date on which apart from this Act his tenancy would come to an end by effluxion of time or could be brought to an end by notice to quit given by the landlord.
Section 40 duties in transfer cases
40A. - (1) If a person on whom a notice under section 40(1) or (3) of this Act has been served has transferred his interest in the premises or any part of them to some other person and gives the appropriate person notice in writing -
(b) of the name and address of the person to whom he transferred it,
on giving the notice he ceases in relation to the premises or (as the case may be) to that part to be under any duty imposed by section 40 of this Act.
(b) the transferor or the transferee has given the person required to give the information notice in writing -
(ii) of the transferee's name and address,
the appropriate person for the purposes of section 40 of this Act and subsection (1) above is the transferee.
(3) If -
(b) neither the transferor nor the transferee has given a notice such as is mentioned in paragraph (b) of that subsection,
any duty imposed by section 40 of this Act may be performed by giving the information either to the transferor or to the transferee.
Termination by tenant of tenancy 25. - (1) After section 27(1) (termination by tenant of fixed term tenancy at end of term)[12] insert -
(2) In section 27(2) (termination by tenant of fixed term tenancy continuing by virtue of section 24) -
(b) omit the word "quarter".
(3) After that subsection insert -
Maximum duration of new tenancy
(3) In section 35(1)[14] (other terms of new tenancy), after the word "thereunder)" insert ", including, where different persons own interests which fulfil the conditions specified in section 44(1) of this Act in different parts of it, terms as to the apportionment of the rent,". Consequential amendments, repeals and subordinate provisions 28. - (1) Schedule 5 to this Order, which contains amendments consequential on the provisions of this Order, shall have effect. (2) The enactments specified in Schedule 6 to this Order are repealed to the extent mentioned in the third column of that Schedule. (3) Schedules 1 to 4 to this Order are designated as subordinate provisions for the purposes of section 4 of the Regulatory Reform Act 2001. (4) A subordinate provisions order relating to the subordinate provisions designated by paragraph (3) above shall be subject to annulment in pursuance of a resolution of either House of Parliament. (5) The power to make a subordinate provisions order relating to those provisions is to be exercisable in relation to Wales by the National Assembly for Wales concurrently with a Minister of the Crown. (6) Paragraph (4) above does not apply to a subordinate provisions order made by the National Assembly for Wales. (7) The notices and statutory declarations set out in Schedules 1 to 4 to this Order shall be treated for the purposes of section 26 of the Welsh Language Act 1993[15] (power to prescribe Welsh forms) as if they were specified by an Act of Parliament; and accordingly the power conferred by section 26(2) of that Act may be exercised in relation to those notices and declarations. Transitional provisions 29. - (1) Where, before this Order came into force -
(b) the tenant made a request for a new tenancy in accordance with section 26 of the Act,
nothing in this Order has effect in relation to the notice or request or anything done in consequence of it.
(ii) which was authorised by the court under section 38(4) of the Act before this Order came into force; or
(b) to a notice under section 27(2) of the Act which was given by the tenant to the immediate landlord before this Order came into force.
(3) Any provision in a tenancy which requires an order under section 38(4) of the Act to be obtained in respect of any subtenancy shall, so far as is necessary after the coming into force of this Order, be construed as if it required the procedure mentioned in section 38A of the Act to be followed, and any related requirement shall be construed accordingly. To: [Name and address of tenant] From: [Name and address of landlord] [a] 1. The following are the requirements referred to in section 38A(3)(b) of the Act. 2. Subject to paragraph 4, the notice referred to in section 38A(3)(a) of the Act must be served on the tenant not less than 14 days before the tenant enters into the tenancy to which it applies, or (if earlier) becomes contractually bound to do so. 3. If the requirement in paragraph 2 is met, the tenant, or a person duly authorised by him to do so, must, before the tenant enters into the tenancy to which the notice applies, or (if earlier) becomes contractually bound to do so, make a declaration in the form, or substantially in the form, set out in paragraph 7. 4. If the requirement in paragraph 2 is not met, the notice referred to in section 38A(3)(a) of the Act must be served on the tenant before the tenant enters into the tenancy to which it applies, or (if earlier) becomes contactually bound to do so, and the tenant, or a person duly authorised by him to do so, must before that time make a statutory declaration in the form, or substantially in the form, set out in paragraph 8. 5. A reference to the notice and, where paragraph 3 applies, the declaration or, where paragraph 4 applies, the statutory declaration must be contained in or endorsed on the instrument creating the tenancy. 6. The agreement under section 38A(1) of the Act, or a reference to the agreement, must be contained in or endorsed upon the instrument creating the tenancy. 7. The form of declaration referred to in paragraph 3 is as follows: - I (name of declarant) of (address) declare that - 1. I/ (name of tenant) propose(s) to enter into a tenancy of premises at (address of premises) for a term commencing on . 2. I/The tenant propose(s) to enter into an agreement with (name of landlord) that the provisions of sections 24 to 28 of the Landlord and Tenant Act 1954 (security of tenure) shall be excluded in relation to the tenancy. 3. The landlord has, not less than 14 days before I/the tenant enter(s) into the tenancy, or (if earlier) become(s) contractually bound to do so served on me/the tenant a notice in the form, or substantially in the form, set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. The form of notice set out in that Schedule is reproduced below. 4. I have/The tenant has read the notice referred to in paragraph 3 above and accept(s) the consequences of entering into the agreement referred to in paragraph 2 above. 5. (as appropriate) I am duly authorised by the tenant to make this declaration. DECLARED this day of . To: [Name and address of tenant] From: [name and address of landlord] 8. The form of statutory declaration referred to in paragraph 4 is as follows: - I (name of declarant) of (address) do solemnly and sincerely declare that - 1. I (name of tenant) propose(s) to enter into a tenancy of premises at (address of premises) for a term commencing on . 2. I/The tenant propose(s) to enter into an agreement with (name of landlord) that the provisions of sections 24 to 28 of the Landlord and Tenant Act 1954 (security of tenure) shall be excluded in relation to the tenancy. 3. The landlord has served on me/the tenant a notice in the form, or substantially in the form, set out in Schedule 1 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. The form of notice set out in that Schedule is reproduced below. 4. I have/The tenant has read the notice referred to in paragraph 3 above and accept(s) the consequences of entering into the agreement referred to in paragraph 2 above. 5. (as appropriate) I am duly authorised by the tenant to make this declaration. To: [Name and address of tenant] From: [name and address of landlord] AND I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declaration Act 1835. DECLARED at this day of . Before me (signature of person before whom declaration is made) A commissioner for oaths or A solicitor empowered to administer oaths or (as appropriate) To: [Name and address of tenant] From: [name and address of landlord] 1. The following are the requirements referred to in section 38A(4)(b) of the Act. 2. Subject to paragraph 4, the notice referred to in section 38A(4)(a) of the Act must be served on the tenant not less than 14 days before the tenant enters into the agreement under section 38A(2) of the Act, or (if earlier) becomes contractually bound to do so. 3. If the requirement in paragraph 2 is met, the tenant or a person duly authorised by him to do so, must, before the tenant enters into the agreement under section 38A(2) of the Act, or (if earlier) becomes contractually bound to do so, make a declaration in the form, or substantially in the form, set out in paragraph 6. 4. If the requirement in paragraph 2 is not met, the notice referred to in section 38A(4)(a) of the Act must be served on the tenant before the tenant enters into the agreement under section 38A(2) of the Act, or (if earlier) becomes contractually bound to do so, and the tenant, or a person duly authorised by him to do so, must before that time make a statutory declaration in the form, or substantially in the form, set out in paragraph 7. 5. A reference to the notice and, where paragraph 3 applies, the declaration or, where paragraph 4 applies, the statutory declaration must be contained in or endorsed on the instrument creating the agreement under section 38A(2). 6. The form of declaration referred to in paragraph 3 is as follows: - I (name of declarant) of (address) declare that - 1. I have/ (name of tenant) has a tenancy of premises at (address of premises) for a term commencing on . 2. I/The tenant propose(s) to enter into an agreement with (name of landlord) to surrender the tenancy on a date or in circumstances specified in the agreement. 3. The landlord has not less than 14 days before I/the tenant enter(s) into the agreement referred to in paragraph 2 above, or (if earlier) become(s) contractually bound to do so, served on me/the tenant a notice in the form, or substantially in the form, set out in Schedule 3 to Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. The form of notice set out in that Schedule is reproduced below. 4. I have/The tenant has read the notice referred to in paragraph 3 above and accept(s) the consequences of entering into the agreement referred to in paragraph 2 above. 5. (as appropriate) I am duly authorised by the tenant to make this declaration. DECLARED this day of To: [Name and address of tenant] From: [name and address of landlord] 7. The form of statutory declaration referred to in paragraph 4 is as follows: - I (name of declarant) of (address) do solemnly and sincerely declare that - 1. I have/ (name of tenant) has a tenancy of premises at (address of premises) for a term commencing on . 2. I/The tenant propose(s) to enter into an agreement with (name of landlord) to surrender the tenancy on a date or in circumstances specified in the agreement. 3. The landlord has served on me/the tenant a notice in the form, or substantially in the form, set out in Schedule 3 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003. The form of notice set out in that Schedule is reproduced below. 4. I have/The tenant has read the notice referred to in paragraph 3 above and accept(s) the consequences of entering into the agreement referred to in paragraph 2 above. 5. (as appropriate) I am duly authorised by the tenant to make this declaration. To: [Name and address of tenant] From: [name and address of landlord] AND I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act 1835 DECLARED at this day of . Before me (signature of person before whom declaration is made) A commissioner for oaths or A solicitor empowered to administer oaths or (as appropriate) 1. The Act shall be amended as follows. 2. After section 14 insert -
14A. Where an order is made for possession of the property comprised in a tenancy to which section 1 of this Act applies and it is subsequently made to appear to the court that the order was obtained by misrepresentation or the concealment of material facts, the court may order the landlord to pay to the tenant such a sum as appears sufficient as compensation for damage or loss sustained by the tenant as the result of the order.".
3.
In section 26(1), for the words "tenancy under which he holds for the time being (hereinafter referred to as "the current tenancy")" substitute "current tenancy".
7.
In sections 57(3)(a) and 58(1)(a) -
8.
In section 59(1), after "(3)" insert the words "to (3B)". 10. Schedule 3 to the Leasehold Reform Act 1967 [16] shall be amended as follows. 11. For paragraph 2(1) substitute -
(1A) A claim to acquire the freehold or an extended lease of the property shall be of no effect if made after the relevant time, but this sub-paragraph is subject to sub-paragraphs (1D) and (1E) below. (1B) In this paragraph (but subject to sub-paragraph (1C) below) "the relevant time" is the end of the period of two months beginning with the date on which the landlord's notice terminating the tenancy has been given or served. (1C) Where -
(b) the tenant applies to the court under section 24(1) of that Act for an order for the grant of a new tenancy before the end of the period of two months mentioned in sub-paragraph (1B) above,
(1D) Sub-paragraph (1A) above shall not apply where the landlord gives his written consent to the claim being made after the relevant time.
12.
After paragraph 2 insert -
(b) the tenant subsequently makes a claim to acquire the freehold or an extended lease of the property; and (c) paragraph 2 above does not render the claim of no effect,
no further steps shall be taken in the proceedings under Part 2 otherwise than for their dismissal and for the making of any consequential order.
13.
After paragraph 10(2) insert -
(This note is not part of the Order) This Order amends Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business, professional and other non-residential tenants) ("Part 2"). Amongst other things, the Act provides that a tenancy to which Part 2 applies continues unless terminated in accordance with the provisions of the Act, and enables the tenant to apply to the court for a new tenancy. Pending agreement on the terms of the new tenancy, the landlord may apply to the court for an interim rent. Where the parties fail to agree, the court fixes the terms of the new tenancy. The landlord may oppose renewal on specific grounds, certain of which give the tenant the right to claim compensation. Before entering into a tenancy, the parties may apply jointly to the court for its approval to an agreement to exclude the provisions of Part 2 which confer security of tenure. Where the court has authorised such an agreement, the tenant has no right to renew the tenancy, and no statutory entitlement to compensation. This Order implements most of the recommendations of the Law Commission contained in their 1992 paper Business Tenancies: A Periodic Review of the Landlord and Tenant Act Part II (Law Com No. 208). (Copies may be obtained from HMSO). A consultation paper "Business tenancies legislation in England and Wales: the Government's proposals for reform" was published by the Department of the Environment, Transport and the Regions in March 2001. Copies may be obtained from the Land and Property Division, Office of the Deputy Prime Minister, Eland House, Bressenden Place, London SW1E 5DU (tel: 020 7944 5559). The main changes made by this Order are as follows: - Renewal and termination procedures Articles 3 to 9 change the procedures to be followed in order to renew a tenancy or to terminate it without renewal. Both landlords and tenants are permitted to apply to the court for the terms of a new tenancy to be settled. Landlords are permitted to apply for an order that the tenancy be terminated without renewal if they can make out one of the statutory grounds for opposition. The requirement for a tenant to serve a counternotice to a landlord's notice of termination is abolished. Time limits for court applications Articles 10 to 12 substitute new time limits for applications to the court to renew tenancies and enable the parties to agree to extend these. Ownership and control of businesses Articles 13 to 17 widen the circumstances in which landlord and tenant can operate the statutory procedures of Part 2. They provide, in particular, that an individual and any company he controls should be treated as one and the same for the purposes of those procedures and that companies controlled by one individual should be treated as members of a group of companies. Interim rent Article 18 introduces several changes relating to interim rent (rent payable pending renewal of a tenancy). Tenants as well as landlords are enabled to apply to the court for interim rent. The date from which any interim rent determined by the court is payable becomes the earliest date for renewal of the tenancy which could have been specified in the statutory notice served by the landlord or tenant. A new method for the calculation of the amount of interim rent is introduced where the landlord does not oppose renewal. The interim rent is set at the same level as the rent for the new tenancy (i.e. usually, the open market rent), but subject to adjustment where market conditions or the occupational terms of the tenancy change significantly during the interim period. In other circumstances, the rules for calculation of interim rent formerly in section 24A(3), and now contained in section 24D(2), continue to apply. Compensation provisions Articles 19 and 20 amend the rules relating to the compensation that a tenant may claim where his tenancy is not renewed. They amend the method of calculation of compensation where the tenant has occupied different parts of premises for different periods of time, and where different landlords control different parts. They also enable a tenant to claim compensation if he is induced not to apply to court, or to withdraw an application for renewal, because of a misrepresentation. Contracting out and agreements to surrender Articles 21 and 22 replace the requirement for both parties to apply to court for approval to an agreement to exclude security of tenure or to surrender a tenancy. The new procedure requires a landlord to serve a prescribed notice on the tenant at least 14 days before the parties enter into such an agreement. The tenant must sign a simple declaration that he has received and accepted the consequences of the notice. If the parties wish to waive the 14 day period, the tenant will have to sign a statutory declaration, rather than a simple declaration, that he has received and accepted the consequences of the notice. In the case of an agreement to exclude security of tenure, the declaration must be made before the tenant enters into the tenancy or becomes contractually bound to do so. In the case of an agreement to surrender, the declaration must be made before entering into the agreement. The forms of the notice, the simple declaration and the statutory declaration are set out in Schedules 1 to 4 to this Order. Notices requiring information Articles 23 and 24 increase the categories of information which a landlord and tenant can require the other to provide towards the end of a tenancy term, in order to enable effective use of the statutory renewal or termination process. They also impose an obligation to keep such information up to date for six months, make provision for parties which transfer their interests and clarify the powers of the court where a party fails to comply with obligations to provide or update information. Tenants' notices of termination Article 25 clarifies what a tenant must do to terminate a tenancy to which Part 2 applies. If a tenant has ceased to occupy the business premises at the expiry of the contractual term, no continuation tenancy arises. Where a tenancy has continued beyond the end of the fixed contractual term, the tenant must give three months notice, ending on any day. Where necessary, rent is apportioned. Other Article 26 increases the length of the term of a new tenancy that the court may order from 14 to 15 years. Article 27 makes provision for landlords of parts of the same business premises to make joint use of the Part 2 procedures. Article 28 introduces Schedules 5 and 6 which make consequential amendments and repeals. Schedules 1 to 4, containing the form of the notices and declarations required by the new section 38A, which is inserted by article 22, are designated as subordinate provisions for the purposes of section 4 of the Regulatory Reform Act 2001. The National Assembly for Wales is given power concurrently with the Secretary of State to amend these provisions. Notes: [1] By virtue of section 5(4) of the Regulatory Reform Act 2001 (c. 6), consultation undertaken before 10 April 2001 (the day on which that Act was passed) is treated as satisfying the consultation requirements of section 5(1) of that Act to the extent that, if it had been undertaken after that day, it would have satisfied those requirements. A consultation paper "Business tenancies legislation in England and Wales: the Government's proposals for reform" was published by the Department of the Environment, Transport and the Regions in March 2001. Copies may be obtained from Land and Property Division, Office of the Deputy Prime Minister, Eland House, Bressenden Place SW1E 5DU (tel: 020 7944 5559).back [4] Section 24(1) was amended by section 3(2) of the Law of Property Act 1969 (c. 59).back [5] Section 31A was inserted by section 7(1) of the Law of Property Act 1969 (c. 59).back [6] Section 34(2) was inserted by section 1(1) of the Law of Property Act 1969.back [7] Section 42(1) was amended by paragraph 3 of Schedule 18 to the Companies Act 1989 (c. 40).back [8] Section 24A was inserted by section 4(1) of the Law of Property Act 1969.back [9] Section 37(1) was amended by section 11 of the Law of Property Act 1969 (c. 59).back [10] Section 37(2) has been amended by section 149(6) of the Local Government and Housing Act 1989 (c. 42), article 2 of the Local Government Finance (Miscellaneous Amendments and Repeal) Order 1990 (S.I. 1990 no. 1285), and section 193 of the Local Government, Planning and Land Act 1980 (c. 65).back [11] The words in section 38(1) which are being substituted by this Order, together with section 38(4), were themselves added by section 5 of the Law of Property Act 1969.back [12] Section 27 was amended by section 4(2) of the Law of Property Act 1969 (c. 59).back [13] Section 44(1) was amended by section 14(1) of the Law of Property Act 1969 (c. 59).back [14] Section 35(1) was numbered as such by paragraph 4 of Schedule 1 to the Landlord and Tenant (Covenants) Act 1995 (c. 30).back
[a] Amended by Correction Slip. On page 16, the following paragraph should be inserted before the paragraph starting "If you to receive this notice......": "If you want to ensure that you can stay in the same business premises when the lease ends, you should consult your adviser about another form of lease that does not exclude the protection of the Landlord and Tenant Act 1954." back
ISBN 0 11 048240 9
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