A Section 26 Notice is a notice, a legal form used by a commercial (business) tenant to be served on their landlord proposing to renew a commercial lease (tenancy) in England & Wales.
These guidelines are based on English law and are not a definitive interpretation of the law, every case is different and only a court can decide. Other UK jurisdictions are similar but there are important differences, particularly in Scotland. If in doubt seek expert advice.
Section 26 of the Landlord & Tenant Act 1954 sets out a procedure under which tenants can end or renew their business (commercial) tenancy. The section 26 notice sets out the information a tenant must give his landlord in order to propose a renewal or to surrender the commercial lease.
The Right to Renew
Under the Landlord & Tenant Act 1954 Part 2, business (commercial) tenants have security of tenure, which means that they have the right to renew their lease (tenancy) when it comes to an end.
A business tenancy therefore does not end at the expiry of a fixed-term, nor can a periodic tenancy be determined by an ordinary notice to quit.
If the landlord and tenant cannot agree on new terms when the lease ends, under the Act tenants have a right to apply to Court for a new lease to be granted. This will always apply with two exceptions:
1 Where the landlord and tenant agreed before the original lease was signed that the tenant’s right of renew under the Act was to be excluded, and that the agreement was to be purely contractual. This is achieved by serving a warning notice and having the tenant sign a declaration, usually more than 14 days before the lease is signed.
2 Where the landlord can successfully oppose renewal on certain limited grounds laid down in the Act. The main grounds are where the landlord originally occupied for his own business purposes and wants to return, and where the landlord wants to re-develop, usually as part of a wider scheme. In both cases the landlord needs good evidence of his intentions, must carry them through, and the tenant is entitled to compensation for business disruption.
Commercial (business) leases are purely contractual, that is the lease clauses are negotiated and binding on the parties, up to the point of renewal, at which point the statutory rules are imposed, giving the tenant rights of renewal and the landlord a set of procedures to follow.
The parties can agree to exclude the provisions of the LTA 1954 to the lease by service of notices to each other under which the tenant agrees to give up her rights. See: Landlord and Tenant
When to Serve the Section 26 Notice
The tenant must serve the notice between 6 and 12 months before the expiry of the fixed term.
The tenant cannot serve a s26 notice if the landlord has already served on him a s25 notice.
The Section 25 Notice is a legal notice which is used by a landlord to either end a business tenancy and re-gain possession of the property, or to propose new terms for renewal of the lease.
The landlord can oppose renewal of the tenancy on certain limited grounds set out in the Act within two months of receiving the Section 26.
If the parties cannot agree on ending the tenancy or renewing the terms of the tenancy, either party can apply to court to end the tenancy or for the court order the grant of a new tenancy and settle the new terms.
For More Information and Notice Templates see:
Landlord and Tenant Act 1954 www.legislation.gov.uk/ukpga/Eliz2/2-3/56/contents
Landlord and Tenant Act 1954 www.landlordzone.co.uk/content/landlord-and-tenant-act-1954
What is a Section 25 notice? www.landlordzone.co.uk/content/what-is-a-section-25-notice
What is a Section 26 Notice? www.landlordzone.co.uk/content/what-is-a-section-26-notice-2
The Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004 – www.legislation.gov.uk/uksi/2004/1005/made
LandlordZONE® Document Downloads – www.landlordzone.co.uk/documents
By Tom Entwistle, LandlordZONE®
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums