Agreement for Letting Shop.
AGREE3SR Agreement for Letting Shop
This form is used to let a shop premises.
1. Agreement 3SR is produced for use where the landlord wishes to let a shop. This form will create an ordinary contractual tenancy and depending on the surrounding circumstances could be subject to the Landlord & Tenant Act 1954 (LTA 1954), however, it is recommended that you seek legal advice in this regard.
2. Under the LTA 1954, a business tenant has security of tenure, which is the right of the tenant to stay in their business premises when the lease ends.
3. It is, however, possible to exclude the provisions of the LTA 1954 so that the tenant does not have security of tenure, by following a strict set of procedures:*
a. The landlord must serve L&T35 on the tenant at least 14 days before the tenant enters into the tenancy or becomes contractually bound to do so. This form contains an important notice to tenants informing them that security of tenure is excluded and the implications of contracting out.
b. If the tenant agrees that the provisions of ss. 24 to 28 of the LTA 1954 shall be excluded, the tenant should sign a simple form declaration (L&T35A) proposing to enter into an agreement with the landlord to exclude the tenancy from security of tenure, that he or she has received and read the Schedule 1 warning notice and has accepted the consequences of entering into the agreement. The declaration does not need to be independently witnessed.
c. Where both parties want to enter into an agreement to exclude security of tenure without waiting for the expiry of the 14 days mentioned above, it is possible to do so, subject to additional safeguards for the tenant. These involve the making of a statutory declaration (L&T35B) in front of a solicitor or commissioner for oaths and is suitable for cases where the tenant needs to occupy the premises quickly.
4. Under the LTA 1954 a business tenancy which is protected will continue (even after the end of the stated term granted by the lease) until it is brought to an end. The most common notices bringing an existing, protected business tenancy to an end are the Section 25 and Section 26 Notices:
(a) L&T25(1) - Landlord’s Notice Ending a Business Tenancy with Proposals for a New One
(b) L&T25(2) - Landlord’s Notice Ending a Business Tenancy and reasons for Refusing a New One
(c) L&T26 – Tenant’s request for a new Business Tenancy
A section 25 notice (L&T25(1) or L&T25(2)) is served on tenant by the landlord, but cannot be given before the last year of the term of the lease. In addition, this notice cannot be given if the tenant has served upon the landlord a request for a new tenancy under section 26 of the LTA 1954.
5. A section 25 notice must specify the date on which the landlord proposes to bring the existing lease to an end, this date cannot be earlier than:
(a) the end date of the lease; or
(b) six months from the date of giving the notice
6. If the tenant requests a new tenancy upon termination of the old one a section 26 notice (L&T26) must be served on the landlord by the tenant. It cannot be served before the last year of the agreed term of the lease, or after the landlord has served a section 25 notice. As with the section 25 notice, the date of termination cannot be earlier than six months after the date of the section 26 request, nor more than 12 months after that date. A section 26 request cannot bring the existing lease to an end before its normal expiry date.
7. The consequence of serving either a section 25 or section 26 notice is that either party has the right conferred by the LTA 1954 to apply to court for the grant of a new tenancy to the tenant. However, they must comply with the required timescales to preserve this right.
8. The landlord can oppose the tenant's application for a new lease, if he can satisfy one of the specific grounds of opposition set out in section 30(1) of the LTA 1954, for example if the tenant is persistently late in paying rent which has become due, or other substantial breaches of their obligations under the current tenancy, or if at the termination of the current tenancy the landlord intends to occupy the property, either to carry on a business or as a residence.
9. A significant benefit to the tenant of the renewal arrangements set out in the LTA 1954 is that the court can oversee, and if the parties cannot reach agreement, decide:
(a) the terms of the new lease to be granted;
(b) the length of the lease; and
(c) the rent payable.
* It is essential to take specialist legal advice about the effect of any notice and what action should be taken to protect your position under the Act.
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